Strategic Review

RNS Number : 2243N

Mavinwood PLC

12 February 2009

 



12 February 2009   

Mavinwood plc

Strategic review and funding arrangements

Mavinwood is exploring a number of strategic initiatives to strengthen its financial position, including consideration of the disposal of certain assets. In order to secure the ongoing support of its banks through this period, Mavinwood has entered into an agreement with its largest shareholder, Geraldton Services Inc. ('Geraldton'), to provide additional equity to the Company. In the event that the Company is not in compliance with its bank covenants as at 30 June 2009, Geraldton will underwrite an equity issue to raise up to £10 million. It is anticipated that any such equity issue, if made, would be made available to all shareholders on a pro-rata basis.  

In addition, Geraldton has agreed to make available to the Company a short-term loan facility of £2.5 million which, if drawn down, would bear interest at 10 per cent. per annum and would be repayable on 30 June 2009.

A cash fee of £750,000 will be payable to Geraldton on 1 July 2009 in connection with these commitments whether or not they are called upon by the Company. With regard to the banks Mavinwood will pay a fee of up to £165,000 and an additional margin of up to 1.5 per cent..

Geraldton is a related party (as defined in the AIM Rules for Companies). The Board considers, having consulted with its nominated adviser, that the terms of each of these transactions are fair and reasonable insofar as its shareholders are concerned. 

Enquiries

Mavinwood plc
Kevin Mahoney	020 7661 9650
Mike Vincent	020 7661 9651
Threadneedle Communications
John Coles	020 7653 9848
Collins Stewart Europe Limited
Adrian Hadden/Adam Cowen	020 7523 8350

 

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