Callidus Capital Plunges to Record Low After Scrapping Dividend

(Bloomberg) -- Callidus Capital Corp. plunged as much as 43 percent to a record low Friday after the embattled lender eliminated its dividend, citing new funding requirements.

Shares fell as low as C$3.01 before rebounding to C$3.61 at 10:35 a.m. in Toronto. The distressed debt lender’s stock has lost more than 80 percent since January 2017.

Callidus said it has closed a new loan for approximately C$125 million ($95 million), bringing its total loan book to C$1.1 billion. The company is scrapping its 10 cents a share monthly dividend “in light of the resumption of growth in the loan portfolio and anticipated funding requirements to support this growth.”

The company, a subsidiary of Catalyst Capital Group Inc., Canada’s second-largest private equity firm, also said it continues to pursue a privatization transaction.

Callidus has been targeted by short-sellers for much of the time it has been public, with a Reuters report in March questioning the quality of its loan book. A Wall Street Journal report last year that said at least four people filed whistle-blower complaints alleging fraud at Catalyst Capital. Its short interest currently stands at 7.5 percent of its free float, up from 3.5 percent in April, according to Markit data.

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