Sidley advised noco-noco Inc. (noco-noco) on an equity line of credit (ELOC) worth up to US$150 million and the registration of the noco-noco’s shares for public resales by the investor on August 29. Noco noco is a technology solutions provider aiming to accelerate the global transformation to a decarbonized economy.
ELOC is a financial instrument in the private credit market, which has grown to over US$2.1 trillion globally, with about three-quarters coming from the U.S, according to data from International Monetary Fund. ELOC offers businesses flexible and accessible financing, often as an alternative to traditional bank loans. It can function as both a debt and an equity instrument, allowing businesses to draw funds up to a predetermined limit or sell securities to investors.
Key characteristics of ELOC:
- Flexibility: Businesses can access funds as needed, within their credit limit.
- Accessibility: It provides an option for businesses that may not qualify for bank loans.
- Risk control: Investors see ELOC as secure due to the potential to recover investments through the sale of businesses’ equity.
- Versatility: It can be used for such purposes as business expansion, mergers and acquisitions, and debt repayment.
ELOCs are typically provided by nonbank financial institutions such as private equity firms and asset management companies. In the Asia market, private credit and ELOC are still emerging, and businesses are advised to seek legal and financial advice before engaging in such transactions.
The Sidley team was led by partners Meng Ding and Raymond Oh and includes managing associate Gilbert Han and senior legal assistants Iris Lao and Alice Liu.
