MariaDB has been warned by a bank lender that it may "sweep" its accounts in retaliation for the publication of a private equity bid for the troubled database company.

Earlier this week, MariaDB [1]confirmed a possible offer of $37.3 million from private equity company K1 Investment Management to take the recently troubled database vendor into private ownership. In the run-up to its 2022 IPO, the company's value was estimated at $672 million. MariaDB plc, which is separate from the MariaDB Foundation running the open source database project, told the markets it [2]had received an "unsolicited non-binding indicative proposal to acquire the company's shares through K5 Private Investors," a fund controlled by K1. The DB company said at the time that its board was reviewing the offer and taking advice.

But early publicity around that offer has provoked a response from one of the company's lenders. A [3]Securities and Exchange Commission filing [PDF] this week reported that RP Ventures, a Nordic early stage investment company that lent MariaDB $26.5 million in October last year, delivered a notice of default to the company.

[4]

According to the filing, the default arose "as a result of a third party publicly announcing" a non-binding bid for MariaDB of $0.55 per share on February 16. This relates to the same non-binding offer of $0.55 per share and same day of the [5]statement from K1 . MariaDB also released [6]a statement about the potential bid, several days after K1's initial statement.

[7]

The SEC filing said MariaDB had received a notice from RP Ventures LLC that the "Event of Default" had "occurred and is continuing." The filing continued to state that this was in violation of a forbearance agreement made with RP Ventures dated February 5. A [8]forbearance agreement can offer borrowers relief on debt repayments and ultimately help lenders recover the debt.

[9]MariaDB receives offer to go private more than year after disastrous IPO

[10]IT consultant fined for daring to expose shoddy security

[11]MariaDB ditches products and staff in restructure, bags $26.5M loan to cushion fall

[12]Venture capital firm makes 'unsolicited' bid for MariaDB buyout

The SEC filing said RP Ventures had provided notice to MariaDB of "its election to [13]sweep the cash in the deposit accounts of the issuer [MariaDB] located in the US that are subject to a control agreement between the applicable financial institution…leaving $1.5 million in such deposit accounts." A cash sweep can be used by lenders to pay down debt with funds from the borrower's accounts.

A MariaDB spokesperson said: "We are a publicly traded company subject to the requirements of the US securities laws and, as we are in an offer period, the Irish Takeover Rules, and I am not able to provide information beyond what has already been publicly disclosed."

The latest SEC filing is a 13D notice, which applies when a group acquires more than 5 percent of a voting class of a company's equity shares. The reporting person was venture capital firm Runa Capital, [14]which made an unsolicited bid for MariaDB in September last year . ®

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[1] https://www.theregister.com/2024/02/20/mariadb_plc_private_offer/

[2] https://www.theregister.com/2024/02/20/mariadb_plc_private_offer/

[3] https://d18rn0p25nwr6d.cloudfront.net/CIK-0001929589/d36be4d8-a37d-4012-a0e0-bcc8d5ec8605.pdf

[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZdjPNk-sXZ8HhC9tuKAbigAAAY0&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0

[5] https://k1.com/meridian/

[6] https://investors.mariadb.com/news/news-details/2024/Announcement-Regarding-Possible-Offer/default.aspx

[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/databases&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZdjPNk-sXZ8HhC9tuKAbigAAAY0&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[8] https://www.kppblaw.com/commercial-loan-workouts/commercial-loan-forbearance-agreement/#:~:text=The%20goal%20of%20the%20forbearance,a%20specific%20period%20of%20time

[9] https://www.theregister.com/2024/02/20/mariadb_plc_private_offer/

[10] https://www.theregister.com/2024/01/19/germany_fine_security/

[11] https://www.theregister.com/2023/10/13/mariadb_restructure/

[12] https://www.theregister.com/2023/09/19/vc_makes_bid_for_mariadb/

[13] https://www.investopedia.com/terms/c/credit-sweep.asp

[14] https://www.theregister.com/2023/09/19/vc_makes_bid_for_mariadb/

[15] https://whitepapers.theregister.com/