Real Good Food PLC (LON:RGD) has now finalised the terms of the previously announced funding arrangements with its three major shareholders.
Omnicane Limited and Napier Brown have each provided £3.3mln in return for secured loan notes while certain funds managed by Downing LLP have agreed to provide at least £1.6mln, with a possible additional £500,000 on the table.
READ: Real Good Food agrees terms for at least £8.2mln in new financing with its three major shareholders
The financing arrangements will fund the £4.5mln deferred consideration due to the vendors of Brighter Foods, and also provide up to £4.2mln (depending on whether the further £500,000 is received from funds managed by Downing LLP) to fund the company's foreseeable working capital needs, including for the build-up of inventory in the run-up to Christmas.
The conversion price of the loan notes issued to Omnicane, Napier Brown and Downing is expected to be 5p; Real Good Foods shares currently trade at 14p.
The coupon on the loan notes is 12% a year, payable when the loan notes are repaid or capitalised, it said in a statement.
The company said the terms are reflective of the severe financial challenges the company has faced over the last 12 months; without the funding there was a realistic chance that the company would cease to be a going concern.
Reflecting the fact that the terms were unchanged from the statement issued on May 4, the shares were unchanged.