7digital expands Investec facility by £1m

(Sharecast News) - Digital music service provider 7digital announced a £1m increase to its revolving credit facility with Investec Bank on Monday, bringing the total facility to £2m.
The AIM-traded firm said the enlarged facility would mature in September 2023, in line with its original terms as agreed in September 2020.

It said the funds drawn would continue to attract interest, payable quarterly, at 6% above the Bank Base Rate.

The company said it would issue 5,437,883 warrants to Investec, with an exercise price of 0.55p and a life of 36 months, in satisfaction of an arrangement fee.

It said the enlarged facility was secured by way of guarantees provided by certain shareholders, including Tamir Koch and David Lazarus, both board directors, as well as the security in place for the existing facility.

"This enlarged credit facility provides low-cost capital that will satisfy our cash requirements as we transition to becoming EBITDA positive," said chief executive officer Paul Langworthy.

"As we stated in our interim results, we have new contracts representing significant revenue that are just awaiting signature.

"While this is taking longer than originally anticipated, we expect they will be finalised in the near-term and enable us to generate positive EBITDA for the full year of 2022."

At 1448 BST, shares in 7digital Group were up 11.52% at 0.53p.