Equity kicker

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Under equity kicker ( English : equity - equity; kick - kick butt) is the possibility of participation in the company's success. This can e.g. B. in the conversion of mezzanine capital into equity, so a "real" participation. A share participation is also conceivable in the event of a later IPO . Lenders are thus given the opportunity to acquire shares in the partnership or corporation to be financed at a later date, often at special conditions.

aims

Due to the risk-compensating effect, the variable, profit-dependent component represented by the equity kicker enables more favorable loan interest rates to be achieved. This lowers the company's ongoing financing costs. On the side of the financier, if the company is successful (higher share price) , the equity kicker leads to an increased return.

Virtual equity kicker

Virtual equity kickers are fixed, agreed special payments that are tied to the success of a company. B. can be linked to the increase in value of a company.

Non-equity kicker

In addition to the interest, a fixed special payment is agreed with the non-equity kicker, which the investor receives at the end of the term of the loan.

In the case of a non-equity kicker, the investor has the option of using so-called shadow warrants (or virtual equity kicker = through which the option right of the mezzanine provider is "virtually" modeled) a capital gain or a return on his invested capital depending on the increase in value of the company.

See also