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Real Good Food finalises terms on funding

Essentially, the terms are as announced on May 4 and reflect the parlous state the company was left in by previous management
Cake ingredients
There's not much icing on this cake but the funding appears to have secured the future of the company

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.

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