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(Alliance News) - Distribution Finance Capital Holdings PLC said Friday it has agreed to reschedule its final loan repayment owed to TruFin PLC.
The payment was originally due December 1, 2020, but will now be paid on January 1, 2021.
The loan was agreed between the pair back in 2018, when DF Capital was a subsidiary of TruFin. DF Capital noted GBP5.0 million was due December 1, 2019, a further GBP5.0 million at the beginning of June this year, and GBP8.9 million this December.
"The rescheduling of the third and final loan repayment allows the company, should the outstanding loan balance not be repaid in full on January 1, 2021, to make phased payments from January 1, 2021 over nine equal interest-bearing instalments," DF Capital explained.
The company continued: "In consideration for extending the term of the loan, the company has agreed an increase in interest rate to 10% on the outstanding balance from the execution date for the balance of 2020. The company has the right, but not the obligation, to repay the outstanding balance on January 1, 2021 in which case no further interest would accrue.
"After January 1, 2021, the company may repay the loan with the written agreement of both parties. Should the Company not repay the facility on January 1, 2021, then interest would accrue over the remaining nine months on the declining balance at 12% per annum."
A transaction fee is also payable to TruFin on exit of the loan, of GBP180,000, DF Capital noted.
In early August, DF Capital noted: "Following the completion of certain re-organisation steps by mid-September, it expects to receive notification of the Prudential Regulation Authority's decision in respect of its banking licence application by the end of September. The re-scheduling of the TruFin loan into 2021 would allow the company greater flexibility in this context."
DF Capital Chief Executive Carl D'Ammassa added: "We are pleased to receive TruFin's support as a long term lender to the group. The reschedule of the loan repayment allows the eventual transition of our funding model. We look forward to sharing details of our forward plans, which we hope will be as a bank, with shareholders at the AGM."
DF Capital will hold its AGM on September 30, when it also expects to publish its interim results and will offer shareholders its medium-term business plan through to 2023.
Shares in Distribution Finance Capital closed 7.7% higher in London on Friday at 44.70 pence each. TruFin lost 4.2% to 23.00p.
By Paul McGowan; paulmcgowan@alliancenews.com
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