Trading Update And Entry Into Loan Facility
Tavistock Investments Plc
("Tavistock" or the "Company")
TRADING UPDATE AND ENTRY INTO LOAN FACILITY
27 September 2019
The Board is pleased to report that the Company is trading in line with market expectations, despite challenging market conditions caused by political instability, anxieties over BREXIT outcomes and international trade disputes.
It is impossible to determine how much more challenging conditions may become over the short term and any potential impact on the Company's future trading before more normal conditions return.
The Board continues to believe that it is in the best long-term interests of the Company to improve profitability through:
· the selective purchases of client books from retiring advisers;
· investment in initiatives designed to significantly improve inflows of FUM; and
· reduction of net debt through scheduled capital repayments under its existing NatWest loan facility.
The Company's regulatory capital requirement has increased as a result of these initiatives. However, the Directors' believe that seeking to raise additional capital now would be unduly dilutive for shareholders. To bolster the regulatory capital position in a manner that is not dilutive to shareholders, they have entered into an unsecured convertible loan facility (the "Facility") with two of the Company's directors and its Chief Investment Officer.
The Facility is for £630,000 and may be drawn down by the Company at any point within the next year. The Facility is unsecured and is being provided by two of the Company's directors, Oliver Cooke and Brian Raven, and by its Chief Investment Officer, Christopher Peel. Each of them has given an irrevocable undertaking to the Company that upon receipt of 30 days' notice and subject to compliance with regulatory obligations regarding close periods, they will provide up to £210,000 of loan capital to the Company on the following terms:
· Facility fee 5% of the funds committed;
· interest payable on funds drawn down of 10%;
· the repayment of any sums drawn down, together with interest thereon, to be made on 30 September 2020;
· the option for the Company only, at its absolute discretion, to elect to convert amounts drawn down, together with interest thereon, into new ordinary shares in the Company of 1p each, at a conversion price of 2p per share, being today's bid price; and
· a non-utilisation fee payable, if appropriate, on 30 September 2020, equivalent to 3% of funds committed but not drawn down.
Related Party Transaction
The entry into the Facility by the Company with Oliver Cooke, Brian Raven and Christopher Peel constitute transactions with related parties under the AIM Rules for Companies. The independent Non-executive Directors of the Company, Roderic Rennison and Peter Dornan, having consulted with the Company's nominated Adviser, Arden Partners, consider that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.
Tavistock Investment plc
Oliver Cooke / Brian Raven +44 (0)1753 867000
Arden Partners plc - Nominated Adviser
Paul Shackleton +44 (0)20 7614 5900
Allenby Capital Limited - Broker
Nick Naylor / Nick Athanas +44 (0)20 3328 5656
Vested - PR Partner
Elspeth Rothwell +44 (0)20 3890 8118
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Quick facts: Tavistock Investments PLC
Market Cap: £11.22 m
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