Rush Factory secures conditional financing agreement to avoid bankruptcy risks in Helsinki

The publicly traded company Rush Factory has once again avoided bankruptcy. The smallest company on the Helsinki Stock Exchange has announced that it has signed a conditional financing agreement with investors from the AktiiviOmistajat group, specifically PM Ruukki Oy and Jerovit Advisory Oy, to secure an investment in the firm. Additionally, ProUp Oy, part of the investor group, is providing Rush Factory with debt financing to ensure the continuation of the company, which has been facing bankruptcy risks.

According to a statement from Rush Factory, the company is also looking to explore new business opportunities and entirely new areas of operation. Existing shareholders will retain just under one-third of the company. The investors are offering a bridge financing of €200,000 to immediately secure the company’s liquidity, along with a €500,000 loan. The new owners will acquire a 25% stake in the company through a directed share issue, with each investing €400,000. The subscription price has been set at €0.108 per share, while the current market price is €0.34.

As a result of this arrangement, current owners’ stake in the company will dilute from 81.6% to 29.5%. Rush Factory has recently been in the news due to repeated bankruptcy threats. The pension company Ilmarinen initially applied for bankruptcy, but the firm managed to fend it off after settling a €47,000 debt. The tax authorities subsequently filed a bankruptcy petition based on approximately €36,000 in claims.

The company’s fate is also closely linked to a property located in Masku, Varsinais-Suomi, where it took out a loan of over half a million euros for constructing a hall that now needs to be repaid. The newly announced financing arrangement will alleviate some of these financial pressures. The company is offering the Masku property as collateral and has attempted to sell it for €1.3 million. If the terms of the arrangement are met, it is expected to be finalized by the end of October, with the directed share issue anticipated by the end of January.