RE: Bought14 Jul 2022 09:32
Iriz - this is the entire rns about financing , nothing in there about the loan being taken in chunks.
Financing
Shield has agreed a financing transaction, through an executed binding letter of intent, which will, when completed, extend the Group's cash runway until approximately the end of calendar 2022 through a shareholder loan in the amount of US$10 million from AOP Orphan International AG ("AOP"), a shareholder owning 13.1% of the Company's issued share capital (registered in the name of MaRu AG).
The loan facility will be structured to be drawn down by 1 August 2022. Interest of 7.0% above the 12-month USD-LIBOR is payable monthly in arrears. The shareholder loan will be secured against the US intellectual property rights associated with Accrufer® and will be repayable in cash in the event that Shield secures a further debt or equity financing for no less than approximately US$30 million or, in any event, by 31 December 2023. The lenders will have the right, but not the obligation, to convert any outstanding loan balances into new ordinary shares in Shield at any time at a 10% discount to the average closing middle market price for the preceding ten business days or, in the event of a new equity raise, on the same terms as all other investors subscribe. An arrangement fee of 2% is payable to the lenders on signing the formal loan documentation. Execution of the formal loan documentation will be subject to Aim Rule 13.
As a result of the loan being convertible into Shield ordinary shares, it is subject to the approval of Shield shareholders. A general meeting of Shield is expected to be convened for the last week of July 2022 for the purpose of obtaining this approval.
Prior to agreeing the shareholder loan, the Company initiated efforts to raise US$30 million in equity which if completed would have provided access to a larger non-dilutive debt facility offered in the form of a non-binding term sheet from a financial institution. However, due to the extremely challenging equity market conditions it became apparent that it was unlikely such an equity financing could be closed at this time.
The Company has continued to engage with various parties in relation to potential financing opportunities and other strategic partnerships, which in combination with the US$10 million loan expected from AOP, has led Shield to re-assess the optimal level and structure of its future funding required to drive sales growth of Accrufer® in the US. That assessment is ongoing and further announcements will be made in due course.
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