Significant portfolio company refinancing

Literacy Capital PLC

03 April 2024

 

The information contained in this announcement is restricted and is not for publication, release or distribution in the United States of America, any member state of the European Economic Area, Canada, Australia, Japan or the Republic of South Africa.

This announcement contains inside information.

3 April 2024

Literacy Capital plc ("Literacy" or the "Fund")

Significant refinancing of portfolio company completed raising substantial cash for Literacy

Transaction highlights

·    The refinancing returns £20m of cash to Literacy Capital plc

·    The enlarged debt facilities with new lenders, give the portfolio company access to additional funding, allowing it to further invest and accelerate growth

·    Cash proceeds will be used to repay drawings under Literacy's RCF, providing flexibility to fund further investments or return capital to shareholders in future

Portfolio update

Literacy is pleased to announce that it has completed the refinancing of one of its largest portfolio companies with new lenders. These new debt facilities released cash to shareholders, including Literacy, with the Fund's share amounting to £20m.

The transactions also included a larger re-organisation of the shareholder base, which saw some minority shareholders exit and realise their holdings. As a result, Literacy benefits through its shareholding in the portfolio company increasing, whilst also returning substantial cash to the Fund.

The new debt facilities will give the business access to more funding, allowing it to be more acquisitive and invest more into growth. This ought to position the company positively for the future and help the company to contribute to further NAV uplifts in future periods.

Literacy intends to use the cash proceeds to repay the majority of the amount drawn under its Revolving Credit Facility, before recycling these proceeds into new investments. This refinancing represents a further example of Literacy's portfolio companies growing maturity and interest from institutional funders in the Fund's portfolio companies. It also demonstrates the active involvement in managing the Fund's interests, ensuring that capital is recycled and deployed efficiently.

In line with recent announcements to the market, the current expectation is that Literacy will continue to receive meaningful cash inflows over the remainder of 2024, given the level of interest in its portfolio companies.

Signing and completion of the transaction has taken place, with £18.5m of cash received prior to Easter, with the balance expected in Q2. The transaction will have an immaterial immediate impact on NAV, compared to Literacy's most recently reported figures (from 31 December 2023).

The name of the portfolio company has not been disclosed and will remain confidential.

Enquiries

For further information, please contact:

Literacy Capital plc / Book Asset Management LLP: Richard Pindar / Tom Vernon	[phone]
MHP Group: Reg Hoare / Ollie Hoare / Matthew Taylor	[phone] [e-mail]
Singer Capital Markets Securities Limited: Robert Peel	[phone]

About Literacy Capital:

Literacy Capital (BOOK.L) is an investment trust that was co-founded by Paul Pindar and Richard Pindar in 2017 with £54 million of capital. Literacy subsequently listed on the London Stock Exchange in June 2021. The Fund focuses on opportunities to invest for the long-term in growing private businesses where a clear route to creating additional value can be seen with its support. The fund structure is evergreen, allowing it to be more flexible and to accommodate the wishes or needs of founders.

The Fund also has a unique charitable objective, to donate 0.9% of NAV annually to charities focused on improving literacy in UK children. Over £8.5 million has been donated or reserved for donation to charities since the trust's creation in 2017 up until 31 December 2023. For more information, please visit our website: www.literacycapital.com.

Website:

www.literacycapital.com

LEI: 2549006P3DFN5HLFGR54

A copy of this announcement will be available on the Company's website at www.literacycapital.com.

 

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