LONDON (Alliance News) - Management Resource Solutions PLC Friday said it has had a first replacement offer for debt financing to back the reverse takeover of Australia's D&M Group, a month after the company said the deal would be delayed after the lender providing the money to back the deal had defaulted on its obligations.
In April, Management Resource Solutions, which had previously flagged "potential difficulties" on drawing down the funds required for the deal, said Halcyon Capital Managemnet Pty Ltd had "defaulted on its obligations under its agreement". Halcyon had been due to provide a AUD17.1 million facility to back the deal, which would be used to refinance Management Resource Solutions' existing borrowing facilities and those of D&M Group, along with backing future investment in the business and additional working capital.
On Friday, Management Resource Solutions said it has received the first replacement offer for debt financing to back the deal and expects further proposals to be tabled next week. The first offer is from an unnamed Australian bank, it said, and is subject to a number of pre-conditions. The company said it expects to be able to draw down the first funds in the first week of July.
Management Resource Solutions said the new facility is significantly smaller than the one from Halcyon, reflecting a lower level of equipment financing to be replaced, significantly lower transaction costs and a smaller ongoing working capital facility.
As a result of the change to the financing, Management Resource Solutions and D&M have agreed to revise the consideration structure, meaning around AUD4 million of the AUD6.7 million consideration will be paid on completion, with the remainder to be deferred for up to three years.
Shares in Management Resource Solutions are currently suspended.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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