04:49 PM EDT, 07/03/2024 (MT Newswires) -- Converge Technology Solutions ( CTSDF ) on Wednesday said the company is deconsolidating its majority-owned subsidiary, Portage CyberTech, for accounting purposes following Converge's decision to relinquish its right to majority representation on the company's board of directors.

With the deconsolidation, Portage CyberTech said it entered into a new stand-alone credit facility with the Canadian Imperial Bank of Commerce for up to $15 million, drawing down $10 million immediately, while the remaining $5 million contingent on achieving financial targets.

"Successfully meeting the criteria necessary to deconsolidate Portage CyberTech from Converge is an important step for each company. This pivot will allow Converge to remain a strong partner and advocate for Portage CyberTech's industry leading products and positions Portage CyberTech on its own accelerated growth path, operating completely independent of Converge," chief executive Shaun Maine said in a release.

Maine will stay on as chair of Portage's board, which consists of three members.

Converge currently retains ownership of approximately 51% of the outstanding common shares of Portage CyberTech in addition to the $25 million long-term loan entered into with the company.

Converge shares closed up $0.01 to $4.44 on the Toronto Stock Exchange.