TIDMNCYT
RNS Number : 3920S
Novacyt S.A.
06 November 2019
Novacyt S.A.
("Novacyt", the "Company" or the "Group")
New term loan and
termination of convertible bond facility
Paris, France and Camberley, UK - 6 November 2019 - Novacyt
(ALTERNEXT: ALNOV; AIM: NCYT), an international specialist in
clinical diagnostics, announces it has agreed a EUR5.0m four-year
term loan. The funds will be used for the repayment of certain
outstanding loans, working capital and the immediate settlement of
its entire convertible bond facility.
This new debt financing of EUR5.0m (EUR4.9m net of fees) has
been provided by Harbert European Growth Capital ("HEGC"). These
funds will be used to immediately reduce certain balance sheet
liabilities and provide significant working capital for the Group.
The funding also means that the EUR5.0m convertible bond facility
provided by Negma Group Ltd ("Negma"), announced on 23 April 2019
has been terminated. Of the EUR2.0m drawn down to date, EUR0.7m was
unconverted and will be redeemend in cash. The remaining EUR3.0m of
the original facility was not drawn down and has now been
cancelled.
Graham Mullis, CEO of Novacyt, commented:
"The financing completed with HEGC is excellent news for the
Company, its shareholders, creditors and employees. We have
continued to experience increasing demand for our products
throughout 2019, which led to 12% growth in sales in H1, however,
trading from the second quarter through to today has been directly
impacted by low levels of working capital. This new financing
addresses the working capital constraints and also removes the
requirement for further drawdowns of the dilutive Negma convertible
bond facility. I would like to express my thanks to Kreos, Vatel
and the former shareholders of Primerdesign who have supported the
Company through to the successful completion of this
refinancing.
"Novacyt's solid operating foundation is its strength in
in-vitro diagnostic product design, development, commercialisation
and contract manufacturing. I look forward to being able to focus
again on building this core foundation as we work hard to restore
shareholder confidence and deliver value through a profitable, high
growth diagnostics company and we encourage shareholders to focus
on these fundamentals."
Johan Kampe, Senior Managing Director at HEGC, commented: "We
are excited to be part of Novacyt's continued growth story and have
been impressed by the Company's sustained growth. We look forward
working with what we believe to be a very high quality management
team."
Lyall Davenport, Investment Associate at HEGC, added: "We have
been impressed by the strong underlying business units within the
Novacyt group, and are excited to contribute to the continued
development of the group and look forward to generating meaningful
shareholder value to the business in the long term."
Use of Proceeds
The planned use of proceeds of the net EUR4.9m is as
follows:
* Full repayment of Kreos Capital bonds EUR1.2m
* Payment of the balance of the final Primerdesign
milestone EUR0.8m
* Repayment of all unconverted debt with Negma EUR0.9m
* Working capital EUR2.0m
Following the completion of the HEGC facility, all liabilities
with Kreos Capital and the former shareholders of Primerdesign have
been settled in full. Furthermore, as reported on 26 September 2019
no further milestone payments are due to Omega Diagnostics for the
acquisition of the Omega Infectious Disease assets.
HEGC term loan
The EUR5.0m HEGC secured term loan is repayable over 48 months
with an intital 12 month interest-only period followed by 36 equal
monthly payments of interest and capital. Key features of the loan
are:
-- Interest is fixed at 11% per annum throughout the four-year term
-- HEGC is granted warrants over 6,017,192 ordinary shares (8.5%
of the principal loan amount) with a conversion price of EUR0.0698
each, representing a 5% discount on the volume weighted average
price ("VWAP") of the ten trading days prior to completion,
exercisable for a period of 7 years from completion
-- Arrangement fee of EUR75,000 (1.5% of the principal loan amount) on completion
-- No fees payable at the end of the loan
-- HEGC have taken a first ranking charge over the assets of the
UK businesses with a pledge over Novacyt
-- Novacyt may pay back the loan in full at any time during the 48 months
Termination of Negma convertible bond facility and cancellation
of warrants
In April 2019, Novacyt entered into a convertible bond facility
with Negma for a maximum amount of EUR5.0m over three years to
support the planned growth of the Group. The Company has drawn down
EUR2.0m from this facility with EUR0.7m of this amount remaining
unconverted into equity representing 278 notes of EUR2,500 each,
which includes 74 notes issued to Negma for the arrangement fee.
Under the termination agreement, the Company has made a full and
final repayment of EUR0.9m to Negma, including redemption premium,
to redeem the remaining unconverted notes. Furthermore, the Company
confirms it will not make any further draw downs against the Negma
convertible bond facility.
Pursuant to the termination agreement, Negma has cancelled
1,300,000 warrants, with an exercise price of EUR0.22 per share
that were granted to it by the Company when it entered into the
convertible bond facility (the "Cancelled Warrants"). This provides
the Company with sufficient shareholder authorities to fulfil the
terms of the warrant agreement with HEGC. Negma continues to hold
1,679,544 warrants (the "Remaining Warrants") which expire in April
2024.
The Company can replace the Cancelled Warrants during the
remaining life of the original warrants on the same terms, subject
to shareholder approval being granted for sufficient authorities
and the exercise price of the Cancelled Warrants and the Remaining
Warrants being modified to EUR0.20 per share. In the event that the
Cancelled Warrants are not replaced, the Company has provided a
guarantee to Negma for any financial loss suffered due to it not
being able to exercise the Cancelled Warrants, which cannot be
exercised in the first 24 months unless the Remaining Warrants have
also been exercised.
Restructure of remaining Vatel Bond
In May 2018, Novacyt entered into an unsecured bond facility
with Vatel Capital SAS ("Vatel") for EUR4.0m to be repaid over
three years at an interest rate of 7.4%. The Company has since
repaid EUR1.5m of this bond, leaving EUR2.5m of capital to pay.
Under the terms of an agreed restructure with Vatel, the interest
rate has been retrospectively increased to 8.9% (effective 31 July
2019) and the term of the loan is extended by 12 months to May
2022, reducing annualised payments due to Vatel by EUR440k.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
- End -
Contacts
Novacyt SA
Graham Mullis, Chief Executive Officer
Anthony Dyer, Chief Financial Officer
+44 (0)1223 395472
SP Angel Corporate Finance LLP (Nominated Adviser and
Broker)
Matthew Johnson / Charlie Bouverat (Corporate Finance)
Vadim Alexandre / Rob Rees (Corporate Broking)
+44 (0)20 3470 0470
FTI Consulting (International)
Brett Pollard / Victoria Foster Mitchell
+44 (0)20 3727 1000
brett.pollard@fticonsulting.com /
victoria.fostermitchell@fticonsulting.com
Mary.whittow@fticonsulting.com
FTI Consulting (France)
Arnaud de Cheffontaines / Astrid Villette
+33 (0)147 03 69 47 / +33 (0)147 03 69 51
arnaud.decheffontaines@fticonsulting.com /
astrid.villette@fticonsulting.com
About Novacyt Group
The Novacyt Group is an international diagnostics business
generating an increasing portfolio of in vitro and molecular
diagnostic tests. Its core strengths lie in diagnostics product
development, commercialisation, contract design and manufacturing.
The Company's lead business units comprise of Primerdesign and
Lab21 Products, supplying an extensive range of high quality assays
and reagents worldwide. The Group directly serves oncology,
microbiology, haematology and serology markets as do its global
partners, which include major corporates.
For more information please refer to the website:
www.novacyt.com
About Harbert European Growth Capital
Since 2014, Harbert European Growth Capital has been providing
specialty debt financing to over 100 European, growth-stage,
technology and life science businesses. Harbert invests in
businesses with strong management teams and proven revenue traction
that are in need of additional capital to fuel further growth.
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END
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