Proactive Investors - Run By Investors For Investors

Real Good Food agrees terms for at least £8.2mln in new financing with its three major shareholders

Real Good Food said the funding is to be provided by means of secured loan notes, with an annual coupon of 12% from the three major shareholders
Cakes
Real Good Food said it is intended that the shareholder loans will be replaced by convertible loan notes in due course

Real Good Food PLC (LON:RGD) has agreed terms for at least £8.2mln in new financing arrangements with the company's three major shareholders to provide additional working capital.

The firm said the funding – with Napier Brown Ingredients Limited, Omnicane International Investors Limited, and certain funds managed by Downing LLP - follows the AIM-listed food producer’s announcement on March 27 that it had identified the need for further substantial additional funding.

READ: Real Good Food sells 'non-core' Garrett Ingredients to Kent Foods for £1.8mln

In addition, the company is due to pay the final tranche of consideration due to the vendors of Brighter Foods of approximately £4.5mln later this month.

The firm said the new financing arrangements will not only fund that deferred consideration, but also provide a maximum of £4.2mln to fund the company's foreseeable working capital needs, including for the build-up of inventory in advance of the Group's third quarter in October to December, which is typically its busiest.

Real Good Food said the funding is to be provided by means of secured loan notes, with an annual coupon of 12% from the three major shareholders.

The group added that it is intended that the shareholder loans will be replaced by convertible loan notes (CLNs) in due course, with the replacement CLNs is expected to be 5p, significantly lower than the company's current share price.

In late afternoon trading on Friday, Real Good Food shares were trading at 14.5p, unchanged on Thursday’s close. 

The firm said the terms are reflective of the severe financial challenges the company has faced over the last twelve months.

Real Good Food added: “Without this funding the Directors believe that there is a significant risk that the Company would fail to be able to trade.

“However, the new management team have begun to address these historic issues and the Board believes that a turnaround of the business is now underway and this additional financing will allow the Company to meet its obligations and trade without working capital constraint.”

View full RGD profile View Profile

Real Good Food PLC Timeline

Related Articles

beer
June 08 2019
The 14-year-old company wants to expand its business model to include the production and the sale of potentially lucrative cannabis-infused beverages -- and it is willing to pay big bucks to get a foothold

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use