Overdraft Facility

RNS Number : 1722O

Real Good Food PLC

16 August 2017

 

For release: 16^th August 2017

Real Good Food plc

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

Overdraft Facility

The Company announces that the Board has agreed a 'cash-collaterised' overdraft facility with Lloyds Bank. The recent re-forecast exercise, announced on 1^st August, identified a short-term working capital requirement as the Company proceeds with its major investment programmes at Renshaw and Haydens during the autumn stock build. In addition, Downing LLP ("Downing") has notified the Company that it has elected, at this time, not to subscribe for the second tranche of the loan notes of £1.5m, which it had an option to subscribe for, pursuant to its original investment announced on 29 June 2017.

Sales within the Cake Decoration Division continue to show strong year on year growth and the need to fund an autumn stock build for a strongly seasonal business is part of the Company's normal trading pattern. Accordingly, Lloyds Bank has agreed to provide the Company with an overdraft facility of up to £2.0m with two major shareholders (Napier Brown Holdings and Omnicane Limited) each putting £1.0m into an account, as security (the "Shareholder Loans").

The Shareholder Loans have an interest rate of 6.5% per annum, which shall accrue daily and compound annually and shall be paid on the date on which the Shareholder Loan is repaid or due to be repaid. The Shareholders Loans are secured against the Company's assets, subject to an inter-creditor agreement between each of Downing, Lloyds Bank plc, Lloyds Bank Commercial Finance Limited, Napier Brown Holdings Limited and Omnicane Limited. The Shareholder Loans are repayable on the first anniversary of the Shareholder Loan agreements, or on the provision of 6 months written notice by the lenders.  The Company can elect to repay the Shareholder Loans early, at its own discretion, subject to written notice.

The Board considered other options that could be provided by other debt providers, however it concluded that these could take a number of weeks to arrange and that the Lloyds offer of a cash-collaterised overdraft facility backed by the Shareholder Loans was the most appropriate option available to meet the Company's short term requirements at this time.

Christopher Thomas, Judith Mackenzie and Hugh Cawley, the Independent Directors of the Company,  having consulted with the Company's Nominated Adviser, finnCap Ltd, consider the terms of the Shareholder Loans to be fair and reasonable insofar as the Company's shareholders are concerned.

-Ends-

The information communicated within 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.

ENQUIRIES:

Real Good Food plc
Chris Thomas, Executive Director	Tel: [phone]
Andrew Brown, Marketing Director
finnCap Ltd (Nomad and Broker)
Matt Goode	Tel: [phone]
Carl Holmes
Daniel Stewart and Company Plc (Joint Broker)
David Lawman	Tel: [phone]
Belvedere Communications (PR)
John West	Tel: [phone]
Kim van Beeck

 

END

 

 

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