New loan facilities, early repayment - Amendment

RNS Number : 9409F

Coral Products PLC

22 June 2012

 



22 June 2012

The following amendment has been made to the announcement released on 22 June 2012 at 7am under RNS No 9197F.

In light of the early repayment, Coral's bankers have agreed to increase the Group's working capital facility by £700,000, thereby significantly enhancing the Group's ability to fund its growth plans, including its working capital needs, over the coming months.

It should read:

In light of the early repayment, Coral's bankers have agreed to increase the Group's working capital facility by £800,000, thereby significantly enhancing the Group's ability to fund its growth plans, including its working capital needs, over the coming months.

All other details remain unchanged.

The full amended text is shown below.

Coral Products plc

("Coral" or "the Company")

New loan facilities, early repayment of existing term loan and increased working capital facility

Related party transaction

Coral announces new loan facilities totalling £500,000, early repayment of its existing term loan and an increased working capital facility.

Since acquiring Interpack Limited in September 2011, the Company has incurred significant capital expenditure in the second half of the year ended 30 April 2012, tooling up to produce a range of food packaging products, as announced on 1 May 2012. As a result of the need to finance this expenditure and the desire for greater flexibility to meet expected increased working capital demands and to support the Company's growth, the board has sought to strengthen its financing lines.

Coral's existing facilities comprise, inter alia, a term loan and a debtor finance facility capped within an overall aggregate indebtedness limit. As detailed in the Company's AIM admission document dated 19 August 2011, the Board arranged a £1.4 million term loan in August 2011 to finance part of the purchase of Interpack Limited. The loan was to be repaid in 24 equal instalments ending in August 2013 and as at 31 May 2012 approximately £900,000 was outstanding.

The new loans comprise a £350,000 asset purchase loan over 3 years on normal commercial terms with Close Brothers Asset Finance and, in addition, Joe Grimmond, Chairman of Coral, has provided the Company with an unsecured loan of £150,000 at 10% interest per annum repayable on or before 31 August 2013.

The new loans will be used to make an early repayment of £500,000 of the term loan. The balance of approximately £400,000 will be repaid by 31 December 2012. In light of the early repayment, Coral's bankers have agreed to increase the Group's working capital facility by £800,000, thereby significantly enhancing the Group's ability to fund its growth plans, including its working capital needs, over the coming months.

Related Party Transaction

The loan provided by Mr Grimmond is a related party transaction as defined in the AIM Rules. The Directors of Coral, other than Mr Grimmond, consider, having consulted with Cairn Financial Advisers LLP, the Company's nominated adviser, that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

Enquiries

Coral Products plc Joe Grimmond, Non-Executive Chairman Warren Ferster, Chief Executive & Managing Director	Tel: [phone] Tel: [phone]
Nominated Adviser Cairn Financial Advisers LLP Avi Robinson / Tony Rawlinson	Tel: [phone]
Broker XCAP Securities plc David Lawman / Adrian Kirk	Tel: [phone]
Bankside Consultants Richard Pearson	Tel: [phone]

 

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