Plenty of debt26 May 2014 17:35
Convertible Notes
The Group has issued a principal amount of £8.24 million of Convertible Notes. The Convertible Notes have a maturity of 5 years and carry an interest rate of between 8% and 11% per annum, reducing with the principal amount outstanding. Interest may be either settled in cash or added to the principal amount. The interest rate may be varied upwards in the event that spot LIBOR plus 3% exceeds 8% per annum. The Convertible Notes are redeemable by the Group in whole or in part at any time prior to their maturity.
Under the terms of the Convertible Notes the Noteholders are entitled to receive 5,665,000 warrants (the "Warrants") to subscribe for new ordinary shares of 25 pence (the "Shares") in the capital of the Company at a price of 80p per Share. At their maturity the Convertible Notes may, at the option of the Noteholders, be converted into Shares at a price of 159 pence per Share ("Conversion").
Issue of the Warrants and Conversion (the "Equity Features") both require the approval of shareholders in a general meeting of the Company. Should the Company fail to approve the Equity Features the interest rate payable on the Convertible Notes would increase to between 25% and 28% per annum, their maturity would reduce to 3 years and the Group would not be able to redeem them prior to maturity.
The Noteholders are also entitled to appoint a non-executive director to the board of the Company. The Company expects to work closely with the Noteholders to identify a suitable individual.
Directors Dealing
Peter Rush, Peter Williams, Hugh Etheridge and Ken Piggott, all Directors of the Company, have subscribed for an aggregate amount of £60,000 of Convertible Notes. They are therefore entitled to the Warrants and conversion rights available to all Noteholders, and this subscription therefore constitutes dealing for the purposes of the AIM Rules for Companies.
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