May 2, Reuters The US lender SVB Financial Group, which went bankrupt, announced on Thursday that SVB Capital, its venture capital division, will be acquired by a company connected to Pinegrove Capital Partners.
According to SVB Financial, a newly established company with permanent funding from Brookfield (BAM.TO) will acquire SVB Capital for a mix of cash and other financial factors. It did not reveal its monetary worth.
SVB Financial has asked for a hearing on June 5th in order to obtain approval from a bankruptcy court.
According to court records, SVB substantial handles around $10 billion in investments on behalf of approximately 750 limited partner investors, including public pensions, who have made substantial contributions to the investment fund.
SVB Financial is still fighting the seizure of about $2 billion in funds by US officials.
Bill Kosturos, chief restructuring officer of SVB Financial Group, stated,
“We believe the agreement maximises the value for the benefit of SVB Financial Group’s constituents, with a significant cash component as well as the ability to participate in the future upside potential of the business.”
SVB Financial had announced in January that it would transfer its remaining venture capital business to a new entity that would be supported by creditors. Approximately 48% of SVB Financial’s most senior debt is held by the coalition supporting the sale, which also includes MFN Partners, Pacific Investment Management Company, Bank of America Securities, JP Morgan Securities, and King Street Capital.
Under the terms of the deal, Brookfield and Sequoia Heritage will provide long-term financial support to Pinegrove and SVB Capital, which will operate independently under the direction of their current management teams.
According to the company, the deal is backed by the major creditor groups of SVB Financial and is contingent to regulatory clearance as well as other usual closing requirements.
Following the failure of Silicon Valley Bank last year, SVB Financial declared bankruptcy.
The company had stated last year that the funds and general partner entities of SVB Securities and SVB Capital were not included in the Chapter 11 filing.
