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XL TechGroup, Inc. (XLT)

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Tuesday 03 January, 2006

XL TechGroup, Inc.

$35m borrowing facility

XL TechGroup, Inc.
03 January 2006


Press Release                                                     3 January 2006


                               XL TechGroup, Inc.


                                ('XL TechGroup')


              XLTechGroup secures US$35 million borrowing facility


XL TechGroup (AIM: XLT), the systematic architect and builder of an ongoing
stream of high value new companies, today announces it has arranged a borrowing
facility of up to US$35 million with Laurus Master Fund Ltd ('Laurus'), a New
York based institutional equity fund that specialises in making direct
investments in growing public companies.  The facility is secured principally
against XL TechGroup's private and public equity assets, including its 27.2 per
cent shareholding in AgCert International plc ('AgCert'), which is listed on the
London Stock Exchange.


Under the terms of the arrangement, XL TechGroup has unrestricted access to
US$25 million to fund its working capital requirements, with a further US$10
million available when XL TechGroup portfolio companies, TyraTech LLC and DxTech
LLC, achieve certain financial milestones.  The facility is due for repayment in
three years and has a variable interest rate, which is currently 9.75 per cent,
being 2.5 per cent over the US Prime Rate.


Laurus has been granted a seven year option to invest up to a total of US$7
million (being 20 per cent of the borrowing facility) in buying shares held by
XL TechGroup in any of its portfolio companies.  In this regard, Laurus has the
option to acquire AgCert shares held by XL TechGroup at a 5 per cent premium to
the AgCert share price as at 30 December 2005, or the option to acquire shares
in any XL TechGroup portfolio company that seeks a stock market listing, at a 20
per cent discount to the then IPO price.  From 30 June 2006, Laurus is also
entitled on an annual basis to receive either cash or additional AgCert shares
from XL TechGroup with a value equivalent to 6 per cent of the outstanding
principal under this facility, calculated in relation to the AgCert share price
at that time.


There are no conditions that would require XL TechGroup to provide additional
security in the event of a fall in the AgCert share price, or to surrender any
AgCert shares, save for a loan default.  Laurus has agreed to be restricted by
the terms of the lock-in entered into between XL TechGroup and AgCert on 3 June
2005, on any AgCert shares that may be due to it under the terms of this
financing arrangement.


John Scott, Chief Executive Officer of XL TechGroup, said: 'We are very pleased
to have secured this funding from Laurus which will enable us to continue the
development of our existing companies as well as new opportunities in our
pipeline.  The terms of the agreement allow us to preserve the substantial
upside value we anticipate from our shares in AgCert, and to do so without
giving up any XL TechGroup equity.  TyraTech and DxTech are making excellent
progress towards significant liquidity events within the next couple of years,
and we are very excited about a number of the opportunities in our business
creation pipeline.'


                                    - ends -


For further information:
XL TechGroup Inc.
John Scott / Harold Gubnitsky                               Tel: +1 321 409 7403
[email protected]                                          www.xltechgroup.com


XL TechGroup media inquiries:
Abchurch Communications
Heather Salmond / Samantha Robbins                     Tel: +44 (0) 20 7398 7700
[email protected]                       www.abchurch-group.com



NOTES TO EDITORS



About XL TechGroup

XL TechGroup identifies unmet market needs in the Biotech, Ecotech and Medtech
sectors and then systematically creates and develops successful disruptive
technology businesses to exploit these needs.  The Company has developed a
unique proven method to rapidly bring companies from inception to liquidity,
matching unexploited IP from a group of corporate and technology partners to the
identified unmet market need.  XL TechGroup employs its own predictive algorithm
to ensure the market will rapidly adopt the identified solution and then moves
to scale the company specifically created to exploit the opportunity.


Before forming XL TechGroup, the management team created substantial value for
shareholders over a twelve year period, successfully exiting six technology
businesses at an average market valuation of approximately US$500 million.


The listing of the first company created under the XL TechGroup banner, AgCert
International, continues to validate the systematic approach to value creation.


•         AgCert International was created by XL TechGroup in May 2002 and is a
global leader in the production and sale of agriculturally derived greenhouse
gas emission reductions, with business in Europe, Asia, North America and South
America.  AgCert was listed on the London Stock Exchange in June 2005 and XL
TechGroup maintains a 27.2% interest in AgCert.  www.agcert.com


The second and third companies in the new generation of XL TechGroup businesses
are:


•         TyraTech LLC, which was created by XL TechGroup in July 2004, is
developing a new class of highly effective, non-toxic pesticides using cloned
insect chemoreceptors, based on approved, safe, natural oils.  Its development
is progressing rapidly particularly in human healthcare applications.  TyraTech,
which is 66.7% owned by XL TechGroup, is continuing discussions with companies
in North America, Asia and Europe as well as numerous national public health
programs about the licensing and distribution rights for its patented
formulations in relation to natural insecticide and personal care products.
www.tyratech.com


•         DxTech LLC was created by XL TechGroup in July 2005, and is developing
a unique micro-fluidic platform that replaces essentially all biological tests
currently performed at reference laboratories with a fully-automated,
point-of-care device.  This technology has applications in significantly
lowering costs and increasing efficiency for major pharmaceutical companies in
their clinical trials, the provision of diagnostics in developing countries and
delivering a new revenue stream for doctors in the USA.  DxTech is currently
100% owned by XL TechGroup.


XL TechGroup has a number of other opportunities already at an advanced stage in
its business creation pipeline, and expects to create one-to-two new companies
annually that can each achieve a liquidity event worth at least US$400 million
within four years from inception.


For further information, see www.xltechgroup.com




                      This information is provided by RNS
            The company news service from the London Stock Exchange                                                                              

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