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(Alliance News) - Bigblu Broadband PLC said Monday it has agreed a new GBP30.0 million revolving credit facility with Santander Bank UK PLC.
The broadband services provider said this new revolving credit facility will be used to replace the two tranches of loan notes totaling GBP12.0 million issued in 2016 by Business Growth Fund and the company's GBP10.0 million revolving credit facility with HSBC PLC.
It will also be used to provide additional working capital to support the company, Bigblu said.
The company also said that HSBC will continue to provide a GBP4.0 million revolving credit facility and operational banking support to the company's UK fixed wireless subsidiary QCL Holdings Ltd. This provides the company with combined facilities of GBP34.0 million with Santander and HSBC.
The facility with Santander is a 3-year loan agreement with an option to extend for up to a further 2 years, the company said.
This replaces, in its entirety, the Business Growth Fund's loan notes which bore interest at a fixed coupon, and the HSBC facility which had an interest charge at a margin related to LIBOR rate, the company said.
"As a result, there will be a significant reduction in the group's annual cost of debt and net interest payments," Bigblu said.
Business Growth Fund continues to own 4.5 million shares in Bigblu, the company said. As part of its initial subscription for the loan notes in 2016, Business Growth Fund had options over 4.9 million ordinary shares at an exercise price of 112.5 pence, expiring August 2021, and a GBP2.4 million convertible loan note convertible at an exercise price of 135 pence per share.
As part of the refinancing, Bigblu said it has agreed to extend the 4.9 million options to May 2024 and granted Business Growth Fund an additional 1.8 million options at an exercise price of 135p pence expiring May 2024 to replace the conversion rights within the GBP2.4 million convertible loan note which is being redeemed in full.
Business Growth Fund has also agreed to defer the repayment of GBP5.5 million redemption premium on the loan notes from May 2021 to May 2024.
Bigblu shares were up 1.5% in London at 100.50 pence each on Monday.
By Loreta Juodagalvyte; loretajuodagalvyte@alliancenews.com
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