Queen’s Road Capital (WKN: A2PZYY), a financing specialist, has secured a new investment in the form of a $70 million convertible debenture, further strengthening its relationship with Canadian uranium development company NexGen Energy. This comes at a time when NexGen is on the verge of receiving final approvals and commencing construction at the world-class Arrow uranium deposit.
Queen’s Road Capital, which is well funded and supported by two of Australia’s most successful entrepreneurs, Jack Cowin (Competitive Foods) and Andrew Forrest (ASX: FMG), is known for its ability to provide financing to exploration companies even in difficult market conditions. The company is led by Warren Gilman and Alex Granger, who have over 60 years of experience in deal making and financing in the global resource sector. What sets Queen’s Road Capital apart is its close connection to the company, as directors and senior executives own approximately 10% of QRC’s shares, which were acquired through market purchases. As a result, QRC has an extremely tight share structure, with 75% of the shares held by three strategic investors, as well as the directors and senior executives.
The investment in NexGen is significant, as it represents the largest single investment to date for Queen’s Road Capital. It also marks the company’s first exit from a major investment, as it converts the existing 2020 debenture into NexGen shares. The sale of these shares will generate a profit of 200% compared to the original investment, as well as an internal rate of return of approximately 50% over the duration of the investment.
With this investment, Queen’s Road Capital’s active debenture portfolio will exceed $149 million in value, generating annual interest income of over $13 million. This will support future dividend payments to shareholders.
In conclusion, Queen’s Road Capital continues to demonstrate its commitment to the resource sector and its ability to provide financing to companies in need. The company’s latest investment in NexGen Energy further solidifies its position as a leading financier in the sector. Investors can expect to see value created through higher stock prices and increased dividends.