23 Aug 2013 13:48
23 August 2013
Eco City Vehicles PLC
("ECV" or "the Group")
Extension of Financing Arrangement with Mercedes-Benz
Eco City Vehicles PLC, a co-developer and supplier of the London licensed Mercedes Vito taxi, is pleased to announce the extension of its financing arrangements with Mercedes-Benz ("MB").
Mercedes-Benz has maintained the company's existing stocking facilities of £5.75m in total, in order to support the working capital required for the continued growth of the business. The terms of the facilities are in line with the company's existing facilities and will enable the company to order additional taxis from MB when required.
In order to facilitate the extension of this stocking facility, KPM-UK Taxi Plc Discretionary Pension Scheme (the "Pension Scheme"), whose beneficiaries are Peter DaCosta, Michael Troullis and Keith Marder (all shareholders of the Group and Peter DaCosta is also a director of the Group) has agreed a letter of subordination addressed to Mercedes-Benz Financial Services UK Limited ("MBFS") in relation to a total of £0.9m (the "Subordinated Pension Loan"), out of a total outstanding loan balance of £1.2m to the Pension Scheme as at 31 July 2013. Pursuant to this letter the Pension Scheme has undertaken, inter alia, to MBFS to maintain the Subordinated Pension Loan until 31 August 2014 by lending back to the Group, subject to HMRC rules, within thirty days of receipt any repayment of principal amounts necessary to ensure that the outstanding loan balance will not be lower than the Subordinated Pension Loan balance. If ECV raises further capital, or acquires any asset, by issue of shares, or if to Eco City Vehicles plc or any member of its group recovers any VAT pursuant to the VAT claim assigned to KPM-UK Taxis Plc by Cabvision Limited, the level at which the Pension Scheme is obliged to maintain the Subordinated Pension Loan shall reduce by the same amount.
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