Flagship Investments : FSI Convertible Note Prospectus


Flagship Investments Limited (FSI)

Unsecured Convertible Notes Offer


Flagship Investments Limited (FSI)

Security Name

Flagship Investments Unsecured Convertible Note

Security Price


Interest Rate


From the Issue Date until the First Step-Up Date: Fixed at

5.50% per annum paid quarterly; and


From First Step-Up Date 6.50% per annum.

First Step-Up Date: 30 September 2024

Step-Up will only occur if the 2 year Bank Bill Swap Rate (or its

successor) as set on the First Step-Up Date, is above 1.2832%.

If Step-Up does not occur, the Interest Rate will remain fixed at


Maturity Date

1 October 2026

Conversion Period

The Conversion Period commences on the second anniversary of

the Initial Issue Date of the Securities and ends 10 Business Days

prior to the Maturity Date.

Conversion Price

$2.70, subject to adjustment for certain dilutionary and other

capital transactions by FSI.

Priority Offer

Any person who has a registered address in Australia and who,

as at the Priority Offer Record Date, was a shareholder in FSI or

any other party as determined by FSI in its discretion.


$20 million

FSI Convertible Notes

| Prospectus

Table of contents

Letter from the Managing Director ------------------------------------------------------------------------


Key dates-----------------------------------------------------------------------------------------------------



Investment overview-------------------------------------------------------------------------------



Flagship Investments - the business------------------------------------------------------------



Financial information and effect of the Offer ---------------------------------------------------



Risk factors-----------------------------------------------------------------------------------------



Australian taxation implications -----------------------------------------------------------------



Material agreements ------------------------------------------------------------------------------



Additional information ----------------------------------------------------------------------------



How to apply ---------------------------------------------------------------------------------------



Note terms -----------------------------------------------------------------------------------------






Glossary --------------------------------------------------------------------------------------------


Corporate directory ----------------------------------------------------------------------------------------


FSI Convertible Notes

| Prospectus


This Prospectus is an important document and requires your immediate attention. It should be read in its entirety. Your investment decision regarding the Offer should be based upon the information contained in this Prospectus, the information disclosed by the Company to the ASX in compliance with its continuous disclosure obligations, and any advice which you determine is necessary or appropriate to inform your decision regarding the Offer. If you do not understand any part of this Prospectus, you should consult your accountant, tax adviser, stockbroker, solicitor or other professional adviser.

Please refer to the instructions in section 8 of this Prospectus regarding your application under the Offer.


This Prospectus is issued by Flagship Investments Limited (ABN 99 080 135 913) (FSI, Flagship Investments, Company or Issuer) in connection with the issue of redeemable, unsecured, unsubordinated, convertible notes (FSI Notes).

This Prospectus is dated 30 August 2021. A copy of this Prospectus was lodged with ASIC on that date. Neither ASIC nor ASX takes any responsibility for the contents of this Prospectus or the merits of any investment under this Prospectus. No FSI Notes will be issued on the basis of this Prospectus after the expiry date. This Prospectus expires on 30 September 2022.

No person may give any information or make a representation about the Offer, which is not in this Prospectus. Information or representations not in this Prospectus must not be relied on as authorised by the Company, or any other person, in connection with the Offer.

This Prospectus provides information for investors to decide if they wish to invest in Flagship Investments. Read this document in its entirety. Examine the assumptions underlying the risk factors that could affect the financial performance of Flagship Investments. Consider these factors carefully in light of your personal financial circumstances. Seek professional advice from your accountant, stockbroker, lawyer or other professional adviser before deciding whether to invest. The Offer does not take into account the investment objectives, financial situation or needs of particular investors.

FSI Convertible Notes

| Prospectus

Letter from the Managing Director

30 August 2021

Dear Investors and fellow Shareholders,

I am pleased to invite you to participate in Flagship Investments Limited's (FSI) convertible note offer. The listed, redeemable, unsecured convertible notes (FSI Notes) are an invitation for new investors to take an interest in our business and to provide existing Shareholders with a further avenue to benefit from their ownership in our Company. The Offer is subject to Shareholder Approval which will be sought at the Annual General Meeting of the Company and a notice of meeting will be sent to Shareholders shortly.

This Prospectus contains further details of the Offer, the terms of the FSI Notes and a description of the risks associated with an investment in the FSI Notes and FSI. I encourage you to read the entire Prospectus carefully and consider the risks before deciding whether to participate in the Offer.

Benefits to Shareholders

The Board first and foremost respect the rights of our Shareholders and will seek opportunities to add value for our loyal Shareholder base. The FSI Notes will provide an immediate injection of capital which will be utilised by the Investment Manager in accordance with the existing Investment Mandate. Based on the since inception portfolio performance of 13.5% per annum there should be respectable uplift in Net Tangible Assets (NTA) over the period after payment of note interest. The uplift in NTA generally culminates in an uplift in FSI's share price and allows for increased dividends over time.

At the point of conversion, the increased market capitalisation of the Company means greater coverage from LIC research houses - expanding the marketability and visibility of FSI.

Benefits to Investors

The FSI Notes are an attractive product that could form a defensive component of an investment portfolio. Currently the returns on cash are negligible and therefore investors are looking for fixed income alternatives. The FSI Notes will provide a return of 5.5% per annum with liquidity subject to market pricing should you wish to exit early. Additionally, the note holder has the conversion option that provides an opportunity to capitalise on share price appreciation after the second anniversary date and 10 days before the 5 year maturity date. Shares in FSI have been tightly held by a loyal Shareholder base, the FSI Notes provide a unique opportunity for a fixed price entry to the Company's diversified portfolio.

FSI currently does not have any other debt and makes a commitment not to extend indebtedness beyond the $20 million raising. This provides Investors with relatively low-risk access to a 5.5% return with additional upsides.

FSI Convertible Notes

| Prospectus


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Flagship Investments Limited published this content on 31 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 August 2021 04:21:08 UTC.