Runa announced on September 15, 2023, that it had made an all-cash offer to MariaDB’s board of directors (the “Board”) to purchase, along with Runa’s affiliates engaged in investment, 100% of the Company’s issued share capital that was not already held by Runa, at a price of $0.56 per share (the “Possible Offer”). In that release, Runa mentioned the Company’s probable senior debt default and said it was ready to provide the Company a US$5 million bridge loan as a stopgap solution, subject to the parties’ agreement on the terms.
Runa Capital Fund II, L.P., represented by its general partner Runa Capital II (GP), (the “Fund”), (the “Commitment”) committed to provide up to $20.0 million to the Company in exchange for senior secured notes issued by MariaDB (the “Notes”) (the “Commitment”), with $15.0 million being issued on closing of the financing and up to an additional $5.0 million to be issued). Runa is happy to announce that the commitment was made on September 24, 2023. If the Company does not completely execute the terms of the Commitment Letter on or before September 29, 2023.
The Commitment stipulates that the granted funds must only be utilised to cover sums owed to the European Investment Bank (“EIB”) by the Company under the term loan tranche that was awarded to the Company in 2019 (the “EIB Loan”). The Company’s good faith and active engagement with Runa Capital II (GP), Runa Capital Fund II, L.P., Runa Capital Opportunity I (GP), Runa Capital Opportunity Fund I, L.P., and Runa Ventures I Limited (collectively, the “Sponsor”) regarding the Potential Offer, as well as (ii) an EIB written demand for payment by the Company under the EIB Loan, are all conditions on the Fund’s obligation to fund the Commitment.
The Notes and all obligations relating to them shall be (i) senior to all other classes of securities and any other debt of the Company of any kind, and (ii) junior to the EIB Loan (to the extent the EIB Loan remains outstanding). With the exception of the fact that the liens securing the Notes will be junior to and subordinate to the liens securing the EIB Loan (to the extent that the EIB Loan is still outstanding), the Notes shall be secured by first priority security interests in the assets of the Company and its affiliates.
The Notes’ interest rate will be 12.5% (non-default), and they will mature 364 days after the financing’s closing. However, they will become due sooner in the event of either (i) a change in control (or the issuance of equity representing more than 50% of the company’s outstanding shares) or (ii) an event of default under the EIB Loan.
Runa (or one of its affiliates) will be given fully-vested warrants to buy common shares of the company (or preferred shares if the company completes a preferred shares financing) in an amount equal to the most warrants that can be issued at a discount to market value without shareholder approval, which is currently estimated to be 676,892. The warrants will have an exercise price of $0.01 per share.
A definitive transaction agreement with mutually agreed-upon terms (including representations, warranties, covenants, and conditions for a transaction of this kind) must be negotiated and executed before Runa can announce its firm intention to make an offer under Rule 2.7 of the Irish Takeover Rules. This includes an expense reimbursement agreement and the successful conclusion of customary due diligence.
The basic rule is that a person develops an interest in securities when they have a sustained economic exposure, whether conditional or absolute, to fluctuations in the price of the securities. In particular, a person will be considered to have a “interest” if they control or own securities, or if they have an option on or derivative referencing assets.
The Irish Takeover Rules, which are available on the Irish Takeover Panel’s website, define the terms in quotation marks.