LIV Capital II Merger Partner Paying for Extension, if Approved

LIV Capital Acquisition II in an 8-K filing said if shjareholders approve a deadline extenszion, its merger partner Covalto agreed to deposit the lesser of $135,000 or 3.5 cents a share into trust.

The SPAC wants to move the deadline from May 10 to Feb 10 of next year.

Covalto is a digital and services platform for SMEs in Mexico, where LIV Capital II is also based. As announced in August, the deal has an estimated pro-forma valuation of $547 million.

The transaction is expected to generate up to $177 million of capital before expenses, assuming no redemptions from LIVB shareholders.

The deal also includes committed financing of $60 million, $30 million of which has been funded and the remainder to be funded by LIV Capital II.

Additional changes to the merger agreement include a requirement that Covalto reimburse the SPAC for out-of-pocket administrative expenses incurred after April 7, capped at $25,000 for each month required under the extension. Covalto would also provide up to $100,000 for fees, costs and expenses incurred from the extension proxy, the extension meeting and the extension contribution.

The parties also revised the termination fee to provide the SPAC with the option, in the that Covalto chooses to pay the fee in the form of fee shares, to elect to receive the option of (i) the fee shares or (ii) both 820,000 Covalto shares and reimbursement for up to 50% of the SPAC's expenses as of the termination date, subject to a $1.5 million cap.

Covalto is required to pay the termination fee if it fails to timely pay the extension contribution or administrative expenses. Read more.


Source: LIV Capital II Merger Partner Paying for Extension, if Approved