12 Apr 2018 07:00
12 April 2018
Northbridge Industrial Services Plc
("Northbridge" or the "Company" or the "Group")
New banking facility and
Issue of loan notes
Northbridge Industrial Services plc, the industrial services and rental company, is pleased to announce the early renewal of its banking facilities with its senior lender, Royal Bank of Scotland group (''RBS''), until 30 June 2021 in conjunction with securing long-term funding through the issue of £4 million of loan notes ("LN"). The new funding arrangements replace existing banking facilities with RBS and KBC which were due for renewal in May 2019.
The issue of the LNs has enabled Northbridge to consolidate its future bank funding solely with RBS group, its existing UK lead bank, on attractive terms and has allowed the Group to fully repay KBC. The LNs diversify the Group's funding sources and the absence of capital repayment during the term provides greater flexibility to invest for growth whilst servicing the RBS facilities.
The £4 million of LNs have been issued at a fixed interest rate of 8%. The LNs are due for repayment in July 2021, if not previously converted to equity, and include the option to extend the term of the instruments by two one-year periods on the consent of Northbridge and the bondholders. If extended, the interest rate on the LNs post July 2021 would increase to 10% per annum. The LNs are secured, through a second charge over the Company.
£3,237,000 of the LNs are convertible into 10p ordinary shares in Northbridge at any time at the discretion of the bondholders at a conversion price of 125p per share. The balance of £763,000 will become convertible on the same terms subject to the passing of a shareholder resolution to grant authority to allot equity securities.
£3,950,000 of the LNs were issued to funds managed by existing shareholder, Gresham House Asset Management ("GHAM"). Of the LNs issued to GHAM, £3,187,000 are convertible into ordinary shares with the remainder becoming convertible subject to the passing of a shareholder resolution as noted above. The balance of £50,000, which are all convertible, were issued to another investor introduced by GHAM. Funds managed by GHAM currently holds 3,191,717 shares in Northbridge, representing 12.32% of the total voting rights.
Iwan Phillips, Finance Director, commenting on the announcement said:
"We are pleased to announce this new funding package with our senior bank and a substantial, supportive shareholder as it marks another key step in the Group's return to growth.
Whilst the Directors remain committed to using cash to further reduce debt, the extended facilities contain lower fixed repayments which will allow the Group to invest for growth when appropriate opportunities arise.''
Graham Bird, Head of strategic equity at Gresham House Asset Management commented:
"We are pleased to be able to support Northbridge by providing long term, secure funding in a way which has enabled the Company to simplify its banking arrangements and provides greater flexibility to invest in growth as the industry recovery gathers pace. The investment is a good example of our flexible and constructive interaction with our investee companies and we are excited about the future potential for Northbridge."
Related Party Transaction
GHAM is a substantial shareholder of the Company and a related party under the AIM Rules. The issue of the LNs to GHAM constitutes a related party transaction under the AIM Rules. The directors of the Company, having consulted with the Company's nominated adviser, Stockdale Securities Limited, consider that the issue of the LNs to GHAM are fair and reasonable insofar as the Company's shareholders are concerned.
For further information
Northbridge Industrial Services plc 01283 531645
Eric Hook, Chief Executive Officer
Iwan Phillips, Finance Director
Stockdale Securities Limited (Nominated Adviser and Broker) 020 7601 6100
Robert Finlay / Antonio Bossi / Henry Willcocks
Buchanan 020 7466 5000
Charles Ryland / Stephanie Watson / Catriona Flint
About Northbridge:
Northbridge Industrial Services plc hires and sells specialist industrial equipment. With offices or agents in the UK, USA, The Middle East, Belgium, Germany, France, Australia, New Zealand, Singapore, China, Brazil and South Korea, Northbridge has a global customer base. This includes utility companies, the oil and gas sector, shipping, banking, mining, construction and the public sector. The product range includes loadbanks, transformers, and oil tools. Northbridge was admitted to AIM in 2006 since when it has grown by providing a high level of service, responsiveness and flexibility to customers. It has grown by the acquisition of companies in the UK, Dubai, Australia, Belgium, New Zealand and Singapore and through investing further in those acquired companies to make them more successful. Northbridge continues to seek suitable businesses for acquisition across the world.