PowerBand Solutions (TSXV: PBX) announced this morning that investor D&P Holdings has elected to exercise its right to acquire 21% of the firms Canadian leasing division. The exercise of the option will see 21% of the division acquired for US$2.5 million, valuing the subsidiary at approximately US$11.9 million.
The option to acquire 21% of PowerBand’s Canadian leasing division is a part of a larger US$10 million convertible debenture investment by D&P Holdings, which upon conversion would allow the firm to acquire a 9% interest in PowerBand’s subsidiary PowerBand Solutions US. The first tranche of that investment, for US$1.5 million, was completed on March 6. Subsequent tranches for $3.5 million and $5 million are set to close April 6 and May 6 respectively.
D&P Holdings is one of the largest administrators of automotive warranty and insurance products in the United States. The firm works with more than 850 dealerships across all 50 US states.
PowerBand is clearly on track to secure extensive credit facilities for its revolutionary transaction system for Canada, the United States and other countries. Powerband will enable a vehicle lease to be approved in seconds, rather than days, as they have proven with Tesla. We think that, in itself, is revolutionary for the automotive sector and will make PowerBand the industry’s preeminent platform where people buy, sell, lease and trade in their vehicles.
John Armstrong, CEO of D&P Holdings
In the event that all debentures are converted, D&P Holdings will own a 9% interest in PowerBand’s US subsidiary, PowerBand Solutions US, as well as a 9% interest in the firms Canadian leasing division. The exercise of the option today increases D&P’s potential ownership in the Canadian leasing division to that of 30% upon full conversion.
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The investment provided today is expected to be put towards securing further credit facilities for PowerBand’s cloud based platform, which enables consumers to buy, sell, lease and trade vehicles on their smartphones and other devices.
PowerBand Solutions last traded at $0.10 on the TSX Venture.
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