Liverpool / UK. (rgf) In an announcement on 29 August (30. August in b:eu) British Real Good Food Company PLC confirmed that the three major shareholders, NB Ingredients Limited, Omnicane International Investors Limited, and certain funds managed by Downing LLP would, if required, provide additional funds to support the Company’s working capital requirements.
Further to this, these shareholders have since agreed to provide to the Company a further short term debt facility in the case of Omnicane International Investors Limited and NB Ingredients Limited (the «Loan Facility») and additional loan notes in the case of certain funds managed by Downing LLP (the «Loan Notes»), of up to 4.0 million GBP, with each of the three shareholders participating equally. The provision of these funds, supplementing the Company’s variable asset-backed lending facility in the short term, is designed to relieve pressure on cash availability as the Company’s autumn stock-build increases in the lead up to the key Christmas trading period and its capital investment programme continues to progress. The Facility and the Loan Notes are secured on unencumbered chattel assets of the Company.
The Loan Facility and the Loan Notes, which are intended to be refinanced as soon as possible, include the following terms:
- Up to 4.0 million GBP in aggregate, with a final repayment date of 30 September 2019.
- An initial tranche of 1.5 million GBP will be drawn down immediately, with further drawdowns possible in tranches of 500’000 GBP.
- A 10 percent coupon, accrued until the first interest payment in March 2018, payable quarterly in arrears thereafter.
- A premium of 10 percent payable on redemption if not repaid on or before 30 September 2018.
The Board considered alternative forms of funding and reviewed the other options that may be available from other debt providers; it concluded however that these would take too long to arrange for the Company’s short-term requirements and that this offer from existing shareholders was therefore the most appropriate and flexible option to meet the Company’s short-term cash requirements.
Christopher Thomas, Harveen Rai and Hugh Cawley, the Independent Directors of the Company, having consulted with the Company’s Nominated Adviser, finnCap Limited, consider the terms of the Loan Facility and the Loan Notes to be fair and reasonable insofar as the Company’s shareholders are concerned.
The Board is pleased to announce that the first part of the 11.0 million GBP investment at Haydens (the Yum Yum line) was commissioned on time and the new product manufacturing line has delivered product successfully and also on time last week. One of two new product manufacturing lines at Renshaw is now producing stock for the Christmas period and the new jam line at R+W Scott has started to deliver product to a major retailer. The majority of the remaining investment in new product manufacturing lines at both Renshaw and Haydens is due to be completed by the end of December 2017. These substantial capital expenditure investments are key to the Company’s long-term growth plans.
Based on overall trading year to date, the Board now believes that the Company will achieve EBITDA of approximately 6.5 million GBP in the year to 31 March 2018 (prior to any exceptional costs incurred during the year). The Company looks forward to seeing the full operational and financial benefits of its capital expenditure programme during the financial year commencing 01 April 2018.
