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30 Sep 2009 15:07
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Financing Arrangements
MavinwoodΒ plcΒ ("Mavinwood" or the "Company")Β announces that it has reached agreement with Lloyds to amend theΒ facility agreement dated 29 July 2009 that Mavinwood entered into with Lloyds TSB Bank plc (the "Lloyds Facility"). In connection with the amendment of the Lloyds Facility,Β MavinwoodΒ has entered into subordinated working capital facilities with Geraldton Services, Inc. ("Geraldton") as followsΒ (the "Subordinated Loans"):
aΒ newΒ Β£3.1Β millionΒ facilityΒ due to be repaid on 1 August 2012Β withΒ interestΒ to be compounded annuallyΒ and paid on the date of repayment of the loan. It is intended that the Β£3.1 million loan will be used to reduceΒ outstanding bank borrowings; and
in substitution for the Β£2.5 million short term facility previously made available by Geraldton, aΒ newΒ Β£2 million facilityΒ due to be repaid on 1 August 2012Β with interest to be compounded annually and paid on the date of repayment of the loan.
Under the terms of the Lloyds Facility, Mavinwood was required to raise a minimum of Β£6 million (gross) in cash by 30 September 2009. TheΒ Lloyds Facility has been amended and now requires aΒ minimumΒ equity injectionΒ by 31 December 2009Β ofΒ an amount equalΒ toΒ (i)Β the Subordinated LoansΒ (includingΒ rolled-up interest)Β plus (ii) the previously announcedΒ fee of Β£900,000Β payableΒ toΒ GeraldtonΒ in connection with their equity underwriting commitment.Β Β TheΒ GeraldtonΒ underwritingΒ feeΒ and the Subordinated Loans (including interest)Β will becomeΒ payable as and whenΒ the aboveΒ equity investment is made.
Geraldton'sΒ underwriting commitmentΒ to invest a further sum ofΒ up to Β£4 million on or before 31 January 2010, should it be required, remains in place. Geraldton's underwriting commitment has been varied to reflect the above.
Geraldton is a related party (as definedΒ inΒ the AIM Rules) and the provision of the SubordinatedΒ LoansΒ and variation of Geraldton's underwriting commitmentΒ constitute related party transactions under the AIM RulesΒ (together the "Transaction"). The Board considers, having consulted with its nominated adviser, Collins Stewart, the terms of theΒ TransactionΒ to be fair and reasonable in so far as the Company's shareholders are concerned. For the purpose of considering theΒ Transaction, Mr Wilson is not regarded as an "independent" director because of his formal links to Lord Ashcroft KCMG, who controls Geraldton. It was therefore agreed that Mr Wilson would not vote, and did not vote, at the Board meeting when the above related party transactions were voted on.
Enquiries to:
Mavinwood plc
Charles Skinner 07966 234075
Collins Stewart
Adrian Hadden 020 7523 8350
Threadneedle Communications
John Coles 020 7653 9848
Collins Stewart Europe Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as nominated adviser to Mavinwood plc and is acting for no-one else in connection with the related party transactions and will not be responsible to anyone other than Mavinwood plc for providing the protections afforded to clients of Collins Stewart Europe Limited nor for providing advice in connection with the related party transactions or any other matter referred to herein.
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