EQTEC PLC (AIM:EQT) shares rallied after it told investors it has agreed a refinancing of its existing secured lending facility with YA and Riverfort.
A new facility is a non-convertible secured term loan and replaces the previous arrangement.
The new loan requires no scheduled repayments until 21 May 2026 and does not include conversion rights (except in the event of a default of the loan terms).
Instead, the new term loan features a 24-month maturity and a 9.5% fixed coupon on the principal.
Repayments will be linked to certain cash inflows into the business – with 20% of net proceeds from future equity fundraisings earmarked along with 25% of other types of inflows, excluding operational turnover. Some 10% of net revenue will also be held for repayment, paid in quarterly arrears.
"We are pleased to secure a new term loan with our secured lenders which we believe is a positive development for EQT,” chief executive David Palumbo said in a statement.
“The material reduction in anticipated cash payments to the lenders, combined with the anticipated cash inflows from the Logik settlement payment will provide a good foundation for EQT to move into a growth phase with increasing recurring monthly revenues from operations.
“The new facility structured as a 24-month bullet loan evidences the increased confidence from our secured lenders in the business model of the company through the implementation of our 'strategic pivot'.
“We appreciate the continued support from our lenders and shareholders."
In London, EQTEC shares rallied around 19% to trade at 1.58p following the announcement.