06:58 AM EDT, 06/17/2024 (MT Newswires) -- Chesswood Group ( CHWWF ) , a specialty finance company, late on Friday said it has decided to pursue the sale of one or more of its business units or the entire company.

Several parties have shown interest in acquiring Chesswood ( CHWWF ) or some of its business units, the company said in an update on its evaluation of its strategic direction that was supervised by a special board committee.

The decision was based on factors including the challenging economic conditions facing specialty finance companies and ongoing capital constraints.

The company noted that current macroeconomic conditions have dampened valuations from what may be achievable once interest rates are lowered and other performance issues are resolved. If a sale does not materialize, the company will commence an orderly winddown of one or more of its business units.

Chesswood ( CHWWF ) recently discovered that, after properly adjusting for a system error, it is not in compliance with its minimum borrowing base covenants under its US$300 million syndicated revolving credit facility. The company has received a waiver from its syndicate of lenders under the credit facility for the period to July 15, allowing it to pursue transactions to address the breach while allowing day-to-day operations to continue.

Chesswood ( CHWWF ) said it will boost its capital position through initiatives including capital-raising activities.