Electric Guitar PLC Provision of Loan Facility and Financial Position (6218R)
30 Octubre 2023 - 1:00AM
UK Regulatory
TIDMELEG
RNS Number : 6218R
Electric Guitar PLC
30 October 2023
30 October 2023
Electric Guitar PLC
("Electric Guitar" or the "Company")
Provision of Loan Facility and Update on Financial Position
Electric Guitar PLC (LSE: ELEG) announces that on 27 October
2023, the Company entered into an agreement with Sanderson Capital
Partners Limited ("Sanderson"), an 18.92% shareholder in Electric
Guitar, for the provision of a loan facility to the Company (the
"Agreement"). A summary of the key terms of the Agreement are set
out below:
-- Amount - GBP250,000, of which at least GBP150,000 will be
satisfied by the issue of shares on the Repayment Date at a price
equal to the price per share at which new ordinary shares are
issued to investors on Admission
-- Repayment Date - The earlier of six months or the successful
admission of the Company's issued share capital to trading on AIM
("Admission")
-- Facility Fee - GBP25,000 to be paid in cash on the Repayment Date
-- Drawdown Fee - 10% on each tranche to be paid in cash on the Repayment Date
-- Interest - Nil
-- Security - Unsecured
-- Drawdown - In three tranches on defined milestones prior to Admission
Further to the Company's recent annual report, the GBP1.2
million raised at IPO in January 2022 has allowed the Company to
research suitable acquisition targets in line with its stated
corporate strategy and funded ongoing running costs of the
Company.
On 7 July 2023, the Company announced that it had identified
3radical Limited ("3radical") as an acquisition target in line with
its corporate strategy and that it had agreed non-binding heads of
terms on a reverse takeover of 3radical (the "Proposed
Transaction"). The Company has been working on the Proposed
Transaction since then, including the necessary due diligence and
preparation to apply for the Company's ordinary shares to be
admitted to trading on AIM, with a view to agreeing a definitive
acquisition agreement and seeking shareholder approval by the end
of the year. In so doing, the Company has incurred significant
costs and the Company's cash position as at 30 September 2023 was
GBP95,605. The loan facility has therefore been put in place by
Sanderson to allow Electric Guitar to be able to fund the further
transaction costs associated with the Proposed Transaction and
provide working capital.
If the Proposed Transaction were not to complete, the Board
would need to assess all options available to the Company.
The Agreement with Sanderson constitutes a material related
party transaction for the purposes of DTR 7.3, due to Sanderson
being a large shareholder of the Company at 18.92%, and was
accordingly voted upon by the Directors (excluding Sarfraz Munshi,
who is a partner of Sanderson and therefore not independent), and
such i ndependent Directors consider the material related party
transaction in respect of the Agreement to be fair and reasonable
from the perspective of the Company and its Shareholders who are
not a related party.
For further information:
Electric Guitar PLC
John Hutchinson
Chairman 01189 570 444
Axis Capital Markets 020 3026 0320
(Corporate Broker) rh@axcap247.com
Richard Hutchison
Yellow Jersey PR
Sarah Hollins 020 3004 9512
Annabelle Wills electric@yellowjerseypr.com
Bessie Elliot
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END
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