Item 3. Source and Amount of Funds or Other Consideration.
The information set forth or incorporated by reference in Item 6 of this Schedule 13D is incorporated by reference into this Item 3.
As further described in Item 6 below, on July 3, 2023, Onex Credit Holdings LLC entered into a subscription agreement with the Issuer (the “Subscription Agreement”), pursuant to which Onex Credit Holdings LLC subscribed for and agreed to purchase Shares with a capital commitment equal to up to $15,000,000 (the “Capital Commitment”). Pursuant to the Subscription Agreement, Onex Credit Holdings LLC was required to fund drawdowns to purchase Shares up to the amount of the Capital Commitment periodically each time the Issuer delivered a drawdown notice to Onex Credit Holdings LLC. The foregoing description of Onex Credit Holdings LLC’s commitment to the Issuer does not purport to be complete and is qualified in its entirety by reference to the Subscription Agreement, a form of which is attached hereto and incorporated herein by reference to Exhibit 99.2.
As of the date hereof, Onex Credit Holdings LLC has purchased 609,508.330 Shares from the Issuer at $24.61 per Share and has paid aggregate consideration of $15,000,000, pursuant to capital drawdown notices from the Issuer.
As further described in Item 6 below, on December 29, 2023, and January 10, 2024, Onex Corporation purchased an aggregate of 87,249.43 Shares at $24.52 per Share for an aggregate purchase price of $2,139,356.12 from another shareholder.
The source of the funds for the purchase of Shares is the available investment capital of Onex Corporation and Onex Credit Holdings LLC including capital contributions from one or more investors for investment purposes.
Item 4. Purpose of Transaction.
The information set forth under Items 3, 5 and 6 of this Schedule 13D is incorporated herein by reference.
The Reporting Persons are affiliates of the Issuer and the Issuer’s investment adviser, Onex Falcon Investment Advisors, LLC, a wholly-owned subsidiary of Onex Falcon Holdings LLC, which is a wholly owned subsidiary of Onex US Holdings Inc., which is a wholly-owned subsidiary of Onex Corporation.
All Shares of the Issuer currently owned by Onex Corporation and Onex Credit Holdings LLC were acquired for investment purposes.
The Reporting Persons acquired beneficial ownership of the Shares for investment purposes because they believed the Shares represented an attractive investment opportunity. The Reporting Persons intend to review the investment in the Issuer on a continuing basis and depending on such review may consider from time to time various alternative courses of action. The Reporting Persons reserve the right, in light of their ongoing evaluation of the Issuer’s financial condition, business, operations and prospects, the market price and availability of the Shares or other securities of the Issuer, conditions in the securities markets generally, general economic and industry conditions, regulatory requirements, other investment opportunities available to them, their business and investment objectives and other relevant factors, to change their plans and intentions at any time or to take such actions with respect to the investment in the Issuer as they deem appropriate, in each case as may be permitted pursuant to applicable law and contractual agreements. The Reporting Persons intend to review their investment in the Issuer on an ongoing basis and, in the course of their review, reserve the right to take actions (including through their affiliates) with respect to their investment or the Issuer, including communicating with the board of trustees of the Issuer (the “Board”), members of management or other security-holders of the Issuer, or other third parties from time to time, taking steps to implement a course of action, including, without limitation, engaging advisors, including legal, financial, regulatory, technical and/or industry advisors, to assist in any review, and evaluating strategic alternatives as they may become available. Such discussions and other actions may relate to, subject to the terms and conditions of the documents described herein to which the Reporting Persons are a party, various alternative courses of action, including, without limitation, those related to an extraordinary corporate transaction (including, but not limited to a merger, reorganization or liquidation) involving the Issuer or any of its subsidiaries; business combinations involving the Issuer or any of its subsidiaries, a sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; material asset purchases; the formation of joint ventures with the Issuer or any of its subsidiaries or the entry into other material projects; changes in the present business, operations, strategy, future plans or prospects of the Issuer, financial or governance matters; changes to the Board (including board composition) or management of the Issuer; acting as a participant in debt financings of the Issuer or any of its subsidiaries, changes to the capitalization, ownership structure, dividend policy, business or corporate structure or governance documents of the Issuer; listing or de-listing or de-registration of the Issuer’s securities, or any action similar to those enumerated above.
Except as otherwise set forth in this Item 4, Item 6 and elsewhere in this Schedule 13D, the Reporting Persons do not have any present plans or proposals that relate to or would result in any of the actions specified in clauses (a) through (j) of the instructions to Item 4 of Schedule 13D. Notwithstanding the foregoing, the Reporting Persons specifically reserve the right to change their intention with respect to any or all of such matters. In reaching any decision as to their course of action (as well as to the specific elements thereof), the Reporting Persons currently expect that they would take into consideration a variety of factors, including, but not limited to, the following: the Issuer’s business and prospects; other developments concerning the Issuer and its businesses generally; other business opportunities available to the Reporting Persons; developments with respect to the business of the Reporting Persons; changes in law and government regulations; general economic conditions; and money and stock market conditions.
Item 5. Interest in Securities of the Issuer.
(a)—(b) The information relating to the beneficial ownership of the Shares by each of the Reporting Persons set forth in Rows 7 through 13 on each of the cover pages hereto is incorporated by reference herein and is as of the date hereof. Such information is based on 11,196,318.798 Shares outstanding as of January 10, 2024, as disclosed by the Issuer to the Reporting Persons. As disclosed herein, Onex Credit Holdings, LLC owns 609,508.330 Shares and Onex Corporation owns 87,322.641 Shares, for an aggregate of 696,830.971 Shares.
This Schedule 13D relates to the Common Shares held of record by Onex Credit Holdings LLC and held by Onex Corporation directly and indirectly through a wholly-owned subsidiary. Onex Corporation may be deemed to beneficially own the Common Shares held by Onex Credit Holdings LLC, through its ownership of all of the equity of Onex Credit Holdings, LLC. Mr. Schwartz, the Chairman of Onex Corporation, indirectly owns shares representing a majority of the voting rights of the shares of Onex Corporation, and as such may be deemed to beneficially own all of the Common Shares beneficially owned by Onex Corporation. Mr. Schwartz disclaims any such beneficial ownership.
(c) Information set forth under Item 3 of this Schedule 13D is incorporated by reference herein. Except as set forth in this Schedule 13D, none of the Reporting Persons has effected any transaction in the Shares in the past 60 days.
(d) To the best knowledge of the Reporting Persons, no one other than the Reporting Persons, or the partners, members, affiliates or shareholders of the Reporting Persons, has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares reported herein as beneficially owned by the Reporting Persons.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
The information set forth in Items 3 and 4 of this Schedule 13D is hereby incorporated herein by reference.
As described in Item 3 above, Onex Credit Holdings LLC has entered into the Subscription Agreement with the Issuer, pursuant to which Onex Credit Holdings LLC has subscribed for and agreed to purchase Shares of the Issuer with a Capital Commitment of up to $15,000,000, all of which Shares have been purchased as of the date hereof. The Subscription Agreement contains customary representations, warranties and covenants of the Issuer and Onex Credit Holdings LLC, and customary indemnification provisions in favor of the Issuer. The assignability and transferability of the Shares are governed by the Subscription Agreement, which imposes substantial restrictions on transfers.
The foregoing description of the Subscription Agreement does not purport to be complete and is qualified in its entirety by reference to the Subscription Agreement, a form of which is attached hereto and incorporated herein by reference to Exhibit 99.2.
Except as described in this Schedule 13D, there are no contracts, arrangements, understandings or between the Reporting Person and any other person, with respect to the Shares of the Issuer.
