(Alliance News) - Tex Holdings PLC on Friday said it has obtained a secured loan facility to replace its overdraft and is seeking to transfer to a standard listing on the Main Market of the London Stock Exchange from a premium listing.
Tex supplies a broad range of products, including plastic injection moulding and panel products, as well as hydraulic piling hammers and air traffic control rooms.
In April, it announced it had breached financial performance covenants with National Westminster Bank PLC and so the bank would be withdrawing Tex's GBP3.2 million overdraft facility.
Former chair and current director Anthony Burrows has agreed that Edward Le Bas Properties, of which Burrows is an associate, "will provide the company with up to GBP7 million in secured loan facilities in order to replace the NatWest overdraft and to provide additional finance to build a new factory and associated working capital".
Tex must obtain shareholder approval for the loan, which is does not intend to refinance in the immediate future. Under the repayment schedule, the new loan is expected to remain in place "for at least seven years".
The listing of Tex's shares was suspended on April 30 at the firm's request while it clarified its financial position. The company also missed the deadline for publishing its 2018 accounts. These have now been published, though the suspension is still in place, and talks with the Financial Conduct Authority are ongoing as to whether Tex can be considered a Premium Listed company after the Edward Le Bas Properties loan deal is complete.
The FCA is seeking assurance that Tex "can access financing other than from its controlling shareholder", which the firm's independent directors believe to be true. However, Tex won't be able to access other funding on that scale after receiving the Edward Le Bas Properties loan.
Tex explained that: "The directors have previously considered that a transfer to the Standard segment could be more consistent with the company's size and structure due to the reduction in compliance costs and the greater degree of regulatory flexibility that a Standard listing would provide."
Tex had held off on the transfer due to the cost of a circular to its shareholders. However, now that it will need shareholder approval anyway for the loan, Tex feels "it is an appropriate time to also ask shareholders to vote on the transfer to the Standard segment of the Official List." This will require approval from at least 75% of shareholders.