(Alliance News) - Scientific consultancy services firm Science Group PLC said on Friday that it has boosted its holding in Frontier Smart Technologies PLC to 52% after the two companies entering into a standby loan agreement.
Science Group subscribed to 4.0 million shares in the home technologies firm for a total of GBP1.0 million. Science Group now owns 23.4 million Frontier Smart shares, worth a total of GBP6.9 million.
Frontier's net assets will be consolidated into Science group's accounts.
Frontier Smart on Wednesday said it did not expect to meet its covenant tests for a loan with Clydesdale Bank PLC, a part of CYBG PLC, and, as a result, Science Group entered into the standby loan facility with Frontier.
The standby loan expires April 2022 and is on broadly the same terms as the Clydesdale facility.
However, the new loan will be a term loan instead of a revolving credit facility, will have an interest rate of three-month LIBOR plus 12% and will be convertible into Frontier Smart shares at 25p per share.
Advisory firm Science Group has been steadily building its stake in Frontier in recent months as it initially pursued a hostile takeover. Frontier said earlier in August that Science Group will now "maintain a significant minority shareholding, ruling out a statutory merger in the near-term".
The two companies initially disagreed over Science Group's valuation of 35.00 pence per share with Frontier telling its shareholders to wait for a 37.00p per share offer.
Shares in Science Group were down 1.7% at 184.35 pence each in London, shares in Frontier Smart were down 7.5% at 23.12p apiece.
Science Group (SAG)
CYBG (CYBG)