Renewal of Inter-Company Debt

RNS Number : 1204L

Vector Capital PLC

29 December 2022

 

Vector Capital plc

("Vector Capital", the "Company" or the "Group")

Renewal of Inter-Company Debt and Related Party Transaction

Vector Capital plc (AIM:VCAP), the commercial lending group that offers secured loans primarily to businesses located in the United Kingdom, announces that it has renewed its inter-company debt terms with Vector Holdings Limited ('Vector Holdings').

On 12 November 2020, prior to Vector Capital's admission to AIM, Vector Holdings entered into an inter-company debt agreement with Vector Capital for a £3 million loan (the 'Vector Holdings Liability').  The terms of the debt agreement were such that:

·	Interest will be payable on the outstanding balance of the Vector Holdings Liability at a rate of 5 per cent. per annum accruing daily and payable quarterly on the last business day of March, June, September and December;
·	The Vector Holdings Liability is repayable on 31 December 2022;
·	Vector Holdings may, by giving notice in writing to the Company, request early repayment of the whole or any part of the Vector Holdings Liability prior to 31 December 2022 and the Company shall give reasonable consideration to any such request;
·	The Vector Holdings Liability is unsecured; and
·	The Company may voluntarily pre-pay the whole or any part of the Vector Holdings Liability at any time without a pre-payment fee being payable.

Under the terms of a Relationship Agreement dated 18^th December 2020, Vector Holdings undertook not to demand repayment of the whole or any part of the Vector Holdings Liability without the prior written consent of at least two independent directors, except in the event of an insolvency.

At a Company board meeting on 28^th December 2022, the revised terms of the loan were approved whereby the Vector Holdings Liability will now be repayable on 31 December 2024, and the interest will be payable on the outstanding balance at a rate of 6.25% per cent. per annum accruing daily and payable quarterly on the last business day of March, June, September and December. The interest rate will be renegotiated by 31 December 2023 in the light of then current rates. All other terms relating to the intercompany debt and the Relationship Agreement remain unchanged.

The revised terms of the loan provide that Company with medium term competitively priced finance, well below the rate currently offered by third party funders, that can continue to be employed to grow the loan book.

Related Party Transaction

Vector Holdings is the parent company of the Group and holds a 75% interest in the Company. Mr. Agam Jain, a director of Vector Capital, is a controlling shareholder of Vector Holdings along with his immediate family. Accordingly, the renewal of the inter-company debt is deemed to be a related party transaction pursuant to AIM Rule 13 of the AIM Rule for Companies.

The Company's Directors (excluding Mr. Agam Jain, who is directly related to this transaction), having consulted with Vector Capital's Nominated Adviser, WH Ireland Limited, consider the revised terms of the loan to be fair and reasonable in so far as the Company's shareholders are concerned.

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

Enquiries

Vector Capital plc	020 8191 7615
Robin Stevens (Chairman)
Agam Jain (CEO)
WH Ireland Limited	020 7220 1666
Chris Hardie, Megan Liddell
IFC Advisory Limited	020 3934 6630
Graham Herring, Florence Chandler, Zach Cohen

Notes to Editors

Vector Capital Plc provides secured, business-to-business loans to SMEs based principally in England and Wales. Loans are typically secured by a first legal charge against real estate. The Group's customers typically borrow for general working capital purposes, bridging ahead of refinancing, land development and property acquisition. The loans provided by the Group are typically for renewable 12-month terms with fixed interest rates.

 

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