What happens contractually and legally in a convertible loan?

Contractually, for investors who choose to convert their loan, the respective loan agreements will be settled for the converted amount. The loan payment plan for the non-converted portion will remain as originally settled. Investors will be referred to the promoter, who will include them as shareholders of their organization. 

In practical terms, the investor can find in his personal GoParity page, within the invested projects section, the confirmation that the loan was converted, as per the examples below. 


If the investor converts 100% of the borrowed debt, the total amount, shown in the progress bar, will correspond to the total amount invested and now considered settled, via conversion, plus the interest received to date. 


In the below example,

  • Amount invested (paid in full and converted into equity/shares): 20,01€  

  • Gross interest earned: 0,29€ 

 

In the case of a partial debt conversion, the progress bar will be updated to the new total amount receivable, this is, the sum of non-converted invested capital and interest (received and receivable). Thus, the progress bar will not be at 100%, indicating that there is capital outstanding remaining. 


In the below example,

  • Total amount invested: 8,00€  

  • Outstanding capital after debt conversion (partial settlement): 6,56€ 

  • Total invested capital, interest received and receivable, after partial settlement: 6,91€ - This figure excludes capital that has been converted into equity or shares. 


 

For example, in the Biovilla project, by investing 2.000€ at an interest of 4,75%, including 12-month grace period a loan term of 5 years, you can convert the debt into at least 4 shares worth 500€ each, after the established period of 12 months. In this case, you would see, in the progression bar of the example image above, a total amount earned of 2.000€, plus the net interest received during the first 12 months of the loan, and the indication that the investment is paid off or 100% paid. 

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GoParity is an impact investment platform that connects companies looking to finance their sustainable projects, with individuals and entities who want to invest sustainably. We are growing, both in terms of size and impact generated. We were born in Portugal in 2017, but have since then financed projects and grown a large community of investors all around the world.

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Part or all of your original invested capital may be at risk and the return on your investment depends on the success of the project invested in. Consider all risks before investing and read the Key Investment Information Sheet (KIIS) for each investment, available at www.goparity.com. Power Parity, Lda is a crowdlending platform authorized and supervised by CMVM (Portuguese Securities Commission). All payments, transfers and funds collection are assured by MangoPay SA, an electronic payments institution authorized and supervised by CSFF (Luxembourg Financial Authority) under the nº 8711.