Amendments to current funding arrangements

RNS Number : 9651S

Real Good Food PLC

28 June 2018

 

Real Good Food plc

("Real Good Food", "the Company" or "the Group")

Amendments to current funding arrangements

The Company announces today that, following negotiations with the Company's three major shareholders, NB. Ingredients Limited ("Napier Brown"), Omnicane International Investors Limited ("Omnicane"), and certain funds managed by Downing LLP ("Downing") (together the "Major Shareholders"), it has now finalised an amendment deed (the "Amendment Deed") relating to the funding agreements (the "Agreements") set out in the appendix to this announcement.

The Agreements have been amended such that the final repayment dates of each of the Agreements have been extended to 30 June 2020 (the "Final Repayment Date") with no change to the interest rate payable by the Company pursuant to each Agreement. In addition, the Amendment Deed provides that, subject to the provisions of an intercreditor agreement between Lloyds Banking Group and each of the Major Shareholders, an amount of cashflow reasonably determined by the Company as surplus to working capital and prudent to be applied in partial prepayment of the funds owed to the Major Shareholders pursuant to the Agreements, shall be applied as such pari passu to each individual Agreement, as funds become available on the basis of a continual review of the position.

It is also agreed in the Amendment Deed that Agreements 1-8 (as set out in the Appendix) will be subject to a 7.5% redemption premium upon early repayment. Furthermore:

·      if Agreement 9 (as set out in the Appendix) is repaid before 12 January 2019, a 5 per cent. redemption premium will apply; otherwise a 7.5% redemption premium will apply upon repayment.

·      if Agreement 10 (as set out in the Appendix) is repaid before 27 March 2019, a 5 per cent. redemption premium will apply; otherwise a 7.5% redemption premium will apply upon repayment.

This arrangement replaces the previous early redemption penalties which varied between nil and 10 per cent. of the principal amount.

Related Party Transactions

As NB Ingredients Ltd, Omnicane and Downing are substantial shareholders of the Company and each has Board representation, the Amendment Deed is deemed to be a related party transaction pursuant to the AIM Rules for Companies.

The Board considers that by extending the final repayment date of the Agreements it substantially alleviates the pressure on the Company to source funding in order to repay the Agreements the repayment dates of which fall due on 28 and 30 June 2018.  Hugh Cawley, Harveen Rai and Christopher Thomas, the Independent Directors of the Company for this purpose, having consulted with the Company's Nominated Adviser, finnCap Ltd, consider the terms of the Amendment Deed to be fair and reasonable insofar as the Company's shareholders are concerned.

The information communicated in this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

APPENDIX

1.    £8,750,000 Loan note instrument dated 28 June 2017 relating to the Downing First Loan Notes constituted by the Company (as amended);

2.    £2,000,000 loan agreement dated 28 June 2017 made between (1) the Company and (2) Napier Brown (as amended);

3.    £2,000,000 loan agreement dated 28 June 2017 made between (1) the Company and (2) Omnicane (as amended);

4.    £1,000,000 loan agreement dated 16 August 2017 made between (1) the Company and (2) Napier Brown (as amended);

5.    £1,000,000 loan agreement dated 16 August 2017 made between (1) the Company and (2) Omnicane (as amended);

6.    £1,333,333 loan note instrument dated 20 September 2017 relating to the Downing Chattel Loan Notes constituted by the Company;

7.    £1,333,333 loan agreement dated 20 September 2017 made between (1) the Company and (2) Napier Brown;

8.    £1,333,333 loan agreement dated 20 September 2017 made between (1) the Company and (2) Omnicane;

9.    £3,000,000 loan note instrument dated 12 January 2018 relating to the Unsecured Loan Notes constituted by the Company with Omnicane and NB Ingredients Ltd each providing £1,285,000 and certain funds of Downing LLP providing £430,000;

10.  £4,000,000 loan note instrument dated 27 March 2018 relating to the Unsecured B Loan Notes constituted by the Company with Omnicane and NB Ingredients Ltd each providing £1,713,332 and certain funds of Downing LLP providing £573,336.

Enquiries:

Real Good Food plc Hugh Cawley, Chief Executive Harveen Rai, Finance Director	Tel: [phone]
finnCap Limited (Nomad and Broker) Matt Goode / Carl Holmes / James Thompson (Corporate Finance)	Tel: [phone]
MHP Communications (Financial PR)  Reg Hoare / Katie Hunt	Tel: [phone] [e-mail]
About Real Good Food Real Good Food plc is a diversified food business serving a number of market sectors including retail, manufacturing, wholesale, foodservice and export. The Company focuses on three main markets: Cake Decoration (Renshaw and Rainbow Dust Colours), Food Ingredients (R&W Scott and Brighter Foods) and Premium Bakery (Haydens and Chantilly Patisserie).

 

END

 

 

MSCFPMATMBITBLP