Terms of Note Restructuring Reached in Principle
Radicle (EPIC: RDP.L), the AIM quoted UK company which owns and operates Australian agribusiness projects, today announces that it has reached an agreement in principle with holders of the Series A Convertible Note ('Note') representing more than 75% of the Note holders, to restructure the terms of the Note.
The terms of the proposed restructuring are conditional upon the Company securing funding adequate to meet working capital for the farm operating and other costs. This funding, and that to pay forthcoming Note coupon payments, are expected to include the disposal of certain of the Company's assets and an issue of new equity, details of which are expected to be announced shortly.
The restructuring provides for a reduction in the face value of the debt to 60% of the original £15.1 million value of the Notes. The face value will be escalated back to 100% over the remaining term of the Notes on a monthly basis. (Notes mature in June 2012). The coupon interest payment due in December 2009 will be deferred until 30 June 2010. Going forward, interest will remain payable at 8% per annum on the face value of the debt. Cash raised as a result of asset sales by Radicle may be applied to reduce debt by buying the Notes back at the reduced face value applicable at the time, after coupon obligations are met.
A Note holder committee will be formed and the Company will provide quarterly updates on the progress of the Company and the sale of assets to Note holders, and will be timed to coincide with scheduled board meetings. Radicle will also provide an opportunity for Note holders to convert to equity when new funds have been raised by the Company and the conversion strike price will be adjusted in accordance with the Trust Deed when new funds have been raised with the price increasing monthly over the life of the Notes.
Chief Executive Tim Bennett commented: 'The revised terms agreed with Note holders give Radicle an attractive opportunity to rationalize its assets and reduce debt overall, and significantly improve its cash position going forward.This is a good result for shareholders, and one which we believe is fair to Note holders. Radicle is now working hard to capitalize on the opportunity to reduce debt and improve cash flows. The creation of project management opportunities in alliances with third party clients and new partners will continue and is expected to boost cash flows and reduce investor risk.'
A meeting of Note holders will be arranged to finalize the restructure in due course.
