(Alliance News) - Medical devices firm Tissue Regenix Group PLC said Monday it was upbeat it could secure a solution with lender MidCap Financial Trust ahead of expectations it will fail its debt covenants.
In June, Tissue announced it secured a revolving credit facility and term loan credit facility of up to USD20 million. As of Friday, Tissue had drawn down USD7.5 million of the term loan and USD600,000 of the credit facility.
On Monday, Tissue said it will face financial covenant testing for the loans by the end of November. This test will relate to revenue reported over the 12 months ended October.
"Based on the data available to the company the board are of the view that the company will fail this covenant test," Tissue said in a statement.
Consequently, Tissue has "proactively engaged" with MidCap with regards the "potential breach" of the convenants.
"These discussions are progressing well and the board is optimistic of being able to agree a solution with MidCap Financial," Tissue added.
In mid-October, Tissue warned 2019 revenue was set to disappoint market consensus forecasts by between 15% and 20% after planned manufacturing output increases were set to come on line later than hoped.
Shares in Leeds-based Tissue were 27% lower at 1.50 pence in London on Monday.
By Ahren Lester; ahrenlester@alliancenews.com
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Tissue Regenix Group (TRX)