Shares in Celadon Pharmaceuticals PLC (AIM:CEL) jumped 30% in morning trading after the company secured a £500,000 unsecured credit facility, providing a near-term boost to its funding position.
The one-year facility, agreed with a European high net worth lender, carries a fixed 10% annual interest rate and can be used for general corporate purposes, including working capital and capital expenditure.
Celadon said the new funds, together with existing resources and support from creditors, should see it through to July.
The company, which focuses on cannabis-based medicines, said the new arrangement complements an existing £7 million credit facility.
However, it also confirmed it no longer expects further funds from that prior agreement. Only £1 million has been drawn so far, with repayment due in November.
As part of the new deal, Celadon secured a waiver from the existing lender to ensure no overlap in how the new funds are used. The company is also in talks with another financing provider, with due diligence reportedly completed.
Celadon reiterated its intention to delist from London’s AIM exchange, but only once additional funding is secured.
The shares were up 3.9p at 16.9p.