More than $450-million in shareholders’ equity is gone: Big loss wipes out net worth of Callidus Capital GlobeBusiness
Lending firm Callidus Capital Corp. reported another deep quarterly loss on Monday and said its net worth had fallen below zero, due partly to the weak financial performance of a number of companies it has acquired.
The firm’s shareholders’ equity, an important measure of the financial health of a financial services company that measures assets against liabilities, tumbled to minus-$5.4-million at the end of December, from $177-million a year earlier. Callidus shares rose as high as $23.25 in August of that year, shortly after the IPO, giving it a market capitalization of nearly $1.2-billion. In a letter to shareholders in early 2015, Mr. Glassman sounded an optimistic note, predicting rapid growth for the newly-public firm. “We have an outstanding and agile team with ample access to capital through our financing partners and our majority owner, The Catalyst Capital Group Inc.,” he wrote.
Over the past two years, Callidus has lost $402-million, blaming several factors including problems facing both its borrowing clients and its acquired companies. They include Oklahoma-based Horizontal Drillers, an energy-service company whose operations in Venezuela have been halted by political turmoil and civil unrest there, and Bluberi, a Quebec-based developer of casino games whose output has lagged early expectations.
The impact extends beyond Callidus’s minority public shareholders, who have watched value of their investment tumble 90 per cent in the past five years, after the stock closed Monday at $1.38. Importantly, Callidus equity and debt also make up sizable parts of the portfolio in a number of Catalyst Capital’s private funds. Those funds are sold to both wealthy individual investors and institutions such as the University of Toronto, McGill University and the Arizona State Retirement System.
“Given the four or five areas of improvement since the time of the National Bank valuation, I personally, and I'm not speaking on behalf of anybody else at this point, I personally would have difficulty unless there's a massive change in market, understanding or supporting anything below basically the high end of National Bank's valuation,” he told analysts in November 2016.
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