The mother or father firm of TikTok rival Triller, which debuted as a publicly traded agency in October, has been sued by a creditor for allegedly failing to pay again a high-interest mortgage on which it owes $35.5 million.
In paperwork filed with the Supreme Courtroom of the State of New York on November 26, attorneys for a hedge fund owned by funding supervisor Yorkville Advisors alleged that Triller Group had defaulted on its debt to the hedge fund, and is now required to pay the complete quantity plus curiosity.
In a submitting with the Securities and Alternate Fee (SEC), notifying the regulator of the lawsuit, Triller Group mentioned the corporate “intends to defend itself vigorously” towards the authorized motion.
The debt originates with Agba, the Hong Kong-focused monetary providers agency that merged with Triller earlier this yr as a part of Triller’s plan to go public.
Agba borrowed $33.5 million from Yorkville Advisors’ hedge fund YA II PN Ltd., in two installments earlier this yr, so as to cowl operational prices as the corporate headed into the merger.
In keeping with court docket paperwork filed by the hedge fund, Agba issued convertible notes to the hedge fund, i.e., bonds that may be transformed to inventory. The notes got here with an 18% rate of interest, and curiosity prices on the debt are accumulating at $16,525 per day.
The debt settlement required Agba to finish its merger with Triller by August 12, 2024, the hedge fund states, and to file a registration assertion with the SEC to make sure correct accounting of any inventory issued to the hedge fund underneath the deal.
The hedge fund alleges that, as a result of the Triller-Agba merger was solely accomplished in October, and since Triller Group additionally missed the deadline to register with the SEC, it’s in default on the debt and has to pay again the complete quantity. Together with curiosity, which got here to round $35.5 million as of the top of November.
“Triller Group and the [debt] guarantors have provided no clarification for his or her failure to honor their contractual obligations,” Yorkville Advisors International Companion Troy J. Rillo mentioned in a sworn assertion to the court docket, which will be learn in full right here.
The hedge fund has requested the court docket to set a deadline of January 27, 2025, for Triller Group to reply to the lawsuit.
Triller Group started buying and selling on the NASDAQ alternate in mid-October. Had the corporate’s inventory risen, Yorkville Advisors’ hedge fund could have been capable of convert its notes from Agba for shares in Triller Group that might have been value greater than the quantity it had lent the corporate.
Nevertheless, Triller’s inventory took a dive on the primary day of buying and selling and has stayed properly beneath its opening value of $5.60 per share since then. It closed at $3.56 per share on Wednesday (December 4).
When Triller and Agba introduced their deliberate merger this previous spring, they predicted the mixed firm could be value $4 billion. Nevertheless, the corporate’s market cap on Wednesday was $551.8 million.
Previous to its merger with Agba, Triller suffered monetary difficulties of its personal, dealing with lawsuits from each Sony Music Leisure and Common Music Group over non-payment of licensing charges for music used on the social media platform.
In an SEC submitting earlier this yr, the corporate revealed it owed $23.6 million in excellent music licensing charges.
As a part of the merger plan agreed to by shareholders in September, the newly merged Triller Group has put aside 50 million shares of firm inventory to be “utilized towards future settlement of sure Triller authorized and monetary obligations.”
On the present share value, these shares are value $178 million.Music Enterprise Worldwide
