Kellan Group (The) PLC Purchase of Secured Fixed Rate Loan Notes (1441T)

TIDMKLN

RNS Number : 1441T

Kellan Group (The) PLC

02 July 2018

2 July 2018

The Kellan Group PLC

("Kellan", the "Company" or "Group")

Purchase of Secured Fixed Rate Loan Notes

The Company is pleased to announce that it has agreed terms of a partial purchase of the outstanding Secured Fixed Rate Secured Loan Notes 2022 (the "Loan Notes") that were issued to BMN Commercial Limited ("BMN Commercial") pursuant to the terms of a Fixed Rate Secured Loan Note Instrument dated 26 October 2016 ("2016 Loan Note Instrument") and which Loan Notes are currently outstanding in the principal sum of GBP600,000. The Company has agreed to purchase a nominal value of GBP360,000 for a purchase price of GBP300,000 ("Purchase Price").

The Purchase Price will be funded by drawdown on the existing confidential invoice discounting facility provided to the Company by Barclays. The Barclays drawdown is at a substantially lower rate of 1.6% over base (2.1%), than the interest on the Loan Notes (5%) and ensures the Company uses its cheapest means of funding first. In addition, the purchase of the Loan Notes will improve the balance sheet to the extent of the discount obtained.

Following the purchase of the GBP360,000 nominal of Loan Notes, the Group has loan notes outstanding to BMN Commercial amounting to GBP1,500,000 and due for repayment on 20 September 2022.

BMN Commercial is a company owned by the family of Paul Bell, who is interested in 62 per cent. of the issued share capital of the Company. Richard Ward, Executive Chairman of the Company, is a director of BMN Commercial. Accordingly, under the AIM Rules, BMN Commercial is deemed to be a related party. The independent directors of the Company consider, having consulted with the Company's nominated adviser, Allenby Capital Limited, that the terms of the partial purchase of the Loan Notes from BMN Commercial are fair and reasonable so far as the shareholders of Kellan are concerned.

Rakesh Kirpalani, Group Finance Director, commented, "We are delighted to have secured agreement to carry out a partial purchase of the existing Loan Notes. The Group had outstanding loan notes amounting to GBP3.2 million in October 2016 and it is pleasing that the Group's trading has enabled the outstanding loan notes to be reduced to the present GBP1.5 million. As a result, the Company is in a stronger financial position, improving its balance sheet and reducing its ongoing financing costs."

ENQUIRIES:

 
 The Kellan Group PLC                         Tel: [phone] 
 Rakesh Kirpalani, Group Finance Director 
 Allenby Capital Limited (Nominated Adviser   Tel: [phone] 
  and Broker) 
 David Worlidge / Asha Chotai 
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

END

AGREASKNASDPEFF

(END) Dow Jones Newswires

July 02, 2018 02:00 ET (06:00 GMT)