Mobile Tornado Group PLC Revolving loan facility with InTechnology (0819C)
September 27 2018 - 2:01AM
UK Regulatory
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RNS Number : 0819C
Mobile Tornado Group PLC
27 September 2018
27 September 2018
Mobile Tornado Group plc
("Mobile Tornado", the "Company" or the "Group")
Revolving loan facility with InTechnology
Mobile Tornado (AIM: MBT), the leading provider of instant
communication mobile applications to the enterprise market,
announces that the Company has on 26 September 2018 entered into a
Revolving Loan Facility agreement (the "Facility Agreement") with
InTechnology Plc ("InTechnology").
Pursuant to the Facility Agreement, which is for a period of two
years from today's date, InTechnology has made available to the
Company a revolving loan facility of up to a maximum principal
amount of GBP300,000. Any new amounts drawn down by the Company
pursuant to the Facility Agreement will be subject to a 2% facility
fee and will bear interest at a rate of 10% per annum. The Facility
Agreement allows for monies to be drawn down, repaid and redrawn
again in any manner and any number of times by the Company until
the agreement expires, however, any monies repaid and subsequently
redrawn will not incur a further facility fee. At the expiration
date of the Facility Agreement, all monies shall be repayable by
the Company to InTechnology together with any facility fee and
accrued interest thereon.
The additional capital will specifically support the financing
of the Company's sales pipeline under the Capex Model where the
Company is required to fund the hardware prior to placement with
the end customer. The Directors anticipate that the Group's
improving financial position should open up wider sources of
working capital from the debt markets. The Board is now engaged
with traditional commercial lenders to partner with the Group in
funding its increasing pipeline under the Capex Model.
The Company has historically received short-term loan funding,
primarily from InTechnology but also, on a limited number of
occasions, from certain directors of the Company, to support the
Company's working capital position. In total, the Company has
received approximately GBP6.2 million of short-term loans since
2010. The Company has historically either repaid these loans, or
they have been capitalised through the issue of ordinary shares or
preference shares. The full details of the historic loans from
InTechnology are contained in the relevant related party note in
the Company's report and accounts.
The Company's current indebtedness to InTechnology is GBP9.0
million, consisting of: GBP5.7 million of redeemable preference
shares; GBP0.6 million of accrued preference share coupon and
interest; GBP2.1 million of short-term borrowings; and a current
account, representing primarily rent and service fees due to
InTechnology, of GBP0.6 million. The Preference Shares have a
redemption date of 31 December 2020. The Company does not currently
have any outstanding short-term loans from Directors of the
Company. Any future loans from InTechnology will be provided
pursuant to the Facility Agreement.
As InTechnology is a substantial shareholder in the Company (as
defined in the AIM Rules for Companies ("AIM Rules")), the Facility
Agreement constitutes a related party transaction under Rule 13 of
the AIM Rules. The independent directors of the Company (excluding
Mr Wilkinson), having consulted with the Company's nominated
adviser, Allenby Capital Limited, consider the terms of the
Facility Agreement to be fair and reasonable insofar as the
Company's shareholders are concerned.
Enquiries:
Mobile Tornado Group plc www.mobiletornado.com
Jeremy Fenn, Chairman +44 (0)7734 475 888
Allenby Capital Limited (Nominated
Adviser & Broker) +44 (0)20 3328 5656
Virginia Bull / James Reeve / Nicholas
Chambers
Walbrook PR Ltd mobiletornado@walbrookpr.com
Paul Cornelius / Sam Allen +44 (0)20 7933 8780
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END
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