Real Good Food PLC Funding Update (0476J)
March 27 2018 - 3:25AM
UK Regulatory
TIDMRGD
RNS Number : 0476J
Real Good Food PLC
27 March 2018
For immediate release: 27 March 2018
Real Good Food plc
("Real Good Food", "the Company" or "the Group")
Funding Update
Real Good Food today announces an update on its funding. As
announced at the time of issuing the Group's Interim Results on 22
December 2017, the Board had identified that further substantial
additional funding will be required over the coming months for
working capital and investment purposes in order to implement the
Group's business plan. The Board continues to explore the detail of
financing this requirement, including the issue of new equity.
As announced on 31 January 2018, the Group's three major
shareholders, Napier Brown Ingredients Limited ("NB Ingredients
Ltd"), Omnicane International Investors Limited ("Omnicane"), and
certain funds managed by Downing LLP ("Downing") continue to
demonstrate their support for the Group. They have today executed a
term sheet, to that end, to provide additional funds to support the
Company's working capital requirements, in the form of a draw-down
loan note facility of up to GBP4.0m in aggregate (the "Loan
Notes"), with Omnicane and NB Ingredients Ltd each providing up to
GBP1.713m and certain funds of Downing LLP providing GBP0.574m (the
"Shareholder Loans"). These funds will relieve pressure on cash
availability over the coming months whilst longer term funding
arrangements are put in place.
Hugh Cawley, Chief Executive, said:
"Today's additional funding is an important part of meeting our
short-term requirements, and further funding will be required for
working capital and investment purposes in order to implement the
Group's business plan. The raising of these Loan Notes is part of
the longer term funding plan being pursued by the Group."
The terms and conditions of the Loan Notes are as follows:
Principal: Up to GBP4.0m in aggregate
Interest: 10% per annum, payable quarterly in arrears
Redemption: Redemption of the Loan Notes will be 30 June 2018, at par, or earlier upon the occurrence
of certain events of default
Transferability: The Loan Notes shall be transferable.
Undertakings: The Company undertakes to use all reasonable endeavours to refinance the Loan Notes with new
equity or convertible loan notes on such terms as to be agreed at the date of redemption and
to obtain grant of a waiver from The Panel on Takeovers and Mergers from any obligation that
might arise under Rule 9 of the City Code from the raising of new equity or the conversion
of the new convertible loan notes by the Subscribers ("Whitewash").
In the event that the Loan Notes are not refinanced with new equity or convertible loan notes
as a result of the Whitewash not being received, the Company will be responsible for the costs
associated with the Whitewash procedure and the Subscribers shall be entitled to payment of
a penalty rate of interest, in cash, equivalent to 20% of the principal and interest due.
The Company undertakes to use all reasonable endeavours to obtain such authorisations as may
be necessary from shareholders in due course to facilitate the refinance of the Loan Notes
via new equity or convertible loan notes.
The Company undertakes to use all reasonable endeavours to agree with the Subscribers a future
capital restructuring (the "Capital Restructuring"). The Capital Restructuring will be in
a form such that the Directors will be in a position to make a working capital statement in
form set out in Schedule Two (c) of the AIM Rules for Companies.
Shareholder Loans and Related Party Transactions
As each NB Ingredients Ltd, Omnicane and Downing are substantial
shareholders of the Company and have Board representation, each of
the Shareholder Loans is deemed to be a related party transaction
pursuant to the AIM Rules for Companies.
The Board has considered alternative forms of funding but has
concluded that these options are not available to the Company in
the required timeframe and that the Loan Notes therefore provide
the most appropriate and flexible option to meet the Company's
short-term cash requirements.
Hugh Cawley, Harveen Rai and Christopher Thomas (the Directors
of the Company who are Independent for the purpose of considering
this), having consulted with the Company's Nominated Adviser,
finnCap Ltd, consider the terms of the Loan Notes 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
Hugh Cawley, Executive Director Tel: 020 38573900
Harveen Rai, Finance Director
finnCap Ltd (Nomad and Broker)
Matt Goode Tel: 020 7220 0500
Carl Holmes
MHP Communications (Financial Tel: 020 3128 8100
PR) rgf@mhpc.com
Reg Hoare / Katie Hunt
Abut Real Good Food plc
Real Good Food plc is a diversified food business serving a
number of market sectors including retail, manufacturing,
wholesale, foodservice and export. The Group focuses on three main
markets: Cake Decoration (Renshaw, Rainbow Dust Colours), Food
Ingredients (Brighter Foods, Garrett Ingredients and R&W Scott)
and Premium Bakery (Haydens and Chantilly Patisserie).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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