KRM22 PLC New Debt Facility (0964Z)

TIDMKRM

RNS Number : 0964Z

KRM22 PLC

16 September 2020

KRM22 plc

("KRM22", the "Group" or the "Company")

New Debt Facility

KRM22 plc (AIM: KRM.L), the technology and software investment company, with a particular focus on risk management in capital markets, is pleased to announce that it has entered into an agreement for a new GBP3.0m convertible loan facility (the "Facility") arranged by Kestrel Partners LLP ("Kestrel"), the Company's largest shareholder. The Facility will be drawn down immediately on satisfaction of the conditions precedent set out in the loan agreement in a single tranche and will replace the Company's existing debt facility provided by Harbert European Growth Capital Fund II ("Harbert"). It is intended that the balance of the outstanding debt and charges of approximately GBP0.85m under the existing Harbert debt facility will be repaid early using the proceeds of the Facility.

The Facility is being provided to strengthen the Company's balance sheet and access to both working capital and growth capital in order to support the short to mid-term opportunities available to the Company.

The COVID-19 environment has reinforced the principle that companies need access to greater liquidity to address uncertainties and extending sales cycles, timing of contract signings and also to provide target customers with confidence in the financial strength of the Group.

Terms of the Facility

The Facility will be for a maximum of GBP3.0m and provided by funds managed by Kestrel Partners LLP. The Facility will be secured on certain Group assets and includes covenants based on the Group's financial performance, based on ARR, solvency and profitability and will also be guaranteed by certain members of the Group

The interest rate payable on debt drawn down is 9.5 per cent. per annum payable in cash quarterly in arrears and carries an arrangement fee of 2 per cent. payable on drawdown by deduction/ retention from the drawn proceeds. The term of the Facility is 3 years.

The Facility can be converted into new Ordinary Shares in the Company at any time at a conversion price of 38p and conversion can be requested by Kestrel at any time. The Company has the right to request conversion 18 months following the date of the agreement, subject to certain conditions regarding the Company's share price at that time. Kestrel has the right to prevent any conversion which would trigger a Rule 9 event under the Takeover Code.

The Kestrel Facility becoming effective and drawdown thereunder is conditional on the Company satisfying the conditions precedent set out in the agreement, including but not limited to the security for Harbert's existing facility being released and the security for Kestrel's Facility becoming effective.

Related Party Transaction

Kestrel is considered a "related party" as defined under the AIM Rules as a result of its substantial shareholding of 18.7 per cent. in the Company. The provision of the Facility by Kestrel constitutes a related party transaction for the purposes of Rule 13 of the AIM Rules.

The Directors consider, having consulted with the Company's nominated adviser for the purposes of the AIM Rules, finnCap, that the terms of the Facility are fair and reasonable insofar as the Company's shareholders are concerned.

Keith Todd CBE, Executive Chairman and CEO commented:

"This Facility will support our current strategy and continued growth and will allow us to make small additional investments in critical resources and support our ongoing working capital requirements."

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

For further information please contact:

KRM22 plc [e-mail]

Keith Todd CBE, Executive Chairman and CEO

Kim Suter, CFO

   finnCap Ltd (Nominated Adviser and Sole Broker)                    [phone] 

Carl Holmes / Kate Bannatyne / Matthew Radley

Alice Lane / Sunila de Silva (ECM)

About KRM22 plc

KRM22 is a closed-ended investment company which listed on AIM on 30 April 2018. The Company has been established with the objective of creating value for its investors through the investment in, and subsequent growth and development of, target companies in the technology and software sector, with a focus on risk management in capital markets.

Through its investments and the Global Risk Platform, KRM22 helps capital market companies reduce the cost and complexity of risk management. The Global Risk Platform provides applications to help address firms' regulatory, market, technology and operations risk challenges and to manage their entire enterprise risk profile.

Capital markets companies' partner with KRM22 to optimise risk management systems and processes, improving profitability and expanding opportunities to increase portfolio returns by leveraging risk as alpha.

KRM22 PLC is listed on AIM and the Group is headquartered in London, with offices in several of the world's major financial centres.

See more about KRM22 at KRM22.com .

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September 16, 2020 02:00 ET (06:00 GMT)