Bakery products specialist Real Good Food (LON:RGD) has clarified payment of a redemption fee on a shareholder loan to former subsidiary Napier Brown, which was sold in May.
The £2.77mln loan was repaid in June along with interest of £324,000 and the redemption fee of £902,000 paid to Napier Brown Ingredients Limited.
That company is 31.8% owned by Peter Ridgwell, a non-executive director of Real Good Food, which made it a related transaction under AIM rules.
No interest had been paid on the loan since 2005, but an agreement been reached in 2014 to pay 10% per year until 2020.
Real Good Food said as there was the possibility of a dispute arising over how much interest was owed on the loan, the board decided it was in the company’s best interest to settle quickly and pay the fee.
The independent directors, excluding Patrick Ridgwell, added that having checked with the company’s nomad they considered that the terms of the Redemption Fee were fair and reasonable.