Financing Arrangements

RNS Number : 9643Z

Mavinwood PLC

30 September 2009

 



Financing Arrangements

Mavinwood plc ('Mavinwood' or the 'Company') announces that it has reached agreement with Lloyds to amend the facility agreement dated 29 July 2009 that Mavinwood entered into with Lloyds TSB Bank plc (the 'Lloyds Facility'). In connection with the amendment of the Lloyds Facility, Mavinwood has entered into subordinated working capital facilities with Geraldton Services, Inc. ('Geraldton') as follows (the 'Subordinated Loans'):

• a new £3.1 million facility due to be repaid on 1 August 2012 with interest to be compounded annually and paid on the date of repayment of the loan. It is intended that the £3.1 million loan will be used to reduce outstanding bank borrowings; and

• in substitution for the £2.5 million short term facility previously made available by Geraldton, a new £2 million facility due to be repaid on 1 August 2012 with interest to be compounded annually and paid on the date of repayment of the loan.

Under the terms of the Lloyds Facility, Mavinwood was required to raise a minimum of £6 million (gross) in cash by 30 September 2009.  The Lloyds Facility has been amended and now requires a minimum equity injection by 31 December 2009 of an amount equal to (i) the Subordinated Loans (including rolled-up interest) plus (ii) the previously announced fee of £900,000 payable to Geraldton in connection with their equity underwriting commitment.  The Geraldton underwriting fee and the Subordinated Loans (including interest) will become payable as and when the above equity investment is made.

Geraldton's underwriting commitment to invest a further sum of up to £4 million on or before 31 January 2010, should it be required, remains in place.  Geraldton's underwriting commitment has been varied to reflect the above.

Geraldton is a related party (as defined in the AIM Rules) and the provision of the Subordinated Loans and variation of Geraldton's underwriting commitment constitute related party transactions under the AIM Rules (together the 'Transaction'). The Board considers, having consulted with its nominated adviser, Collins Stewart, the terms of the Transaction to be fair and reasonable in so far as the Company's shareholders are concerned. For the purpose of considering the Transaction, Mr Wilson is not regarded as an 'independent' director because of his formal links to Lord Ashcroft KCMG, who controls Geraldton. It was therefore agreed that Mr Wilson would not vote, and did not vote, at the Board meeting when the above related party transactions were voted on.

Enquiries to:

Mavinwood plc                    

Charles Skinner                                           07966 234075

Collins Stewart

Adrian Hadden                                            020 7523 8350

Threadneedle Communications        

John Coles                                                   020 7653 9848

Collins Stewart Europe Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as nominated adviser to Mavinwood plc and is acting for no-one else in connection with the related party transactions and will not be responsible to anyone other than Mavinwood plc for providing the protections afforded to clients of Collins Stewart Europe Limited nor for providing advice in connection with the related party transactions or any other matter referred to herein.

 

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