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Tern PLC - internet-of-things focused investor - Determines that it has insufficient funds to meet capital calls by Sure Valley Ventures Enterprise Capital Fund LP. Says it has exhausted what it considers to be ‘all reasonable mitigation measures, including salary reductions, open offer fundraising, shareholder engagement, and collaborative effort with SVV2 to identify a replacement investor’. In June, shareholders rejected a resolution to give Tern directors authority to disapply preemption rights when allotting shares for cash. Then, an open offer to shareholders in October for up to £642,486 only delivered proceeds of £151,136. As a result, Tern has requested relief from its funding obligations to SVV2 and will be classified as a defaulting investor. Remedies available under the limited partnership agreement include forfeiture of existing capital or the compulsory transfer of Tern’s interest in SVV2. If Tern’s existing paidin capital is not required to be forfeited, and no other SVV2 Ltd partner elects to assume Tern’s commitment, Tern’s paidin capital will remain invested within SVV2 until the cessation of the fund, at which point any residual value will be returned in accordance with the LPA, ‘although defaulting investor status may reduce Tern’s rights to distributions during the life of the fund and could limit Tern’s recovery compared to non-defaulting investors,’ company notes. In March 2022 Tern committed to invest up to £5 million in SVV2 over the fund’s 10-year life. To date, has invested about £1.3 million. At June 30, the unaudited fair value of Tern’s shareholding in SVV2 was about £800,000. Tern still expects its cash runway to last into the first quarter of 2026. Current share price: 0.37 pence, down 17% on Friday in London 12-month change: down 75% Copyright 2025 Alliance News Ltd. All Rights Reserved.
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