Water Intelligence PLC Bank Financing (0535R)
December 06 2016 - 2:01AM
UK Regulatory
TIDMWATR
RNS Number : 0535R
Water Intelligence PLC
06 December 2016
Water Intelligence plc
("Water Intelligence", the "Group" or the "Company")
Bank Financing
The board of Water Intelligence, a leading provider of
non-invasive leak detection and remediation solutions, is pleased
to confirm a bank financing agreement ("Agreement") with People's
United Bank, N.A. ("People's"). Under the terms of the Agreement,
People's will refinance the Company's existing $1.6 million term
debt with Liberty Bank of Connecticut. People's will also make
available both a $1.5 million acquisition line of credit and a
$500,000 line of credit so that the Company can accelerate its
growth strategy that includes strategic reacquisition of profitable
franchisees. Combined with the recent equity issuance which raised
approximately $1 million of capital from US and UK investors, the
Agreement enables the Company to push its growth strategy with up
to approximately $3 million of new capital (combined debt and
equity) while minimizing dilution to shareholders.
The Agreement's three banking facilities have the following
terms. First, the refinanced $1.6 million term loan will carry an
interest rate of 4.78% that is fixed for four years. As a result,
the yearly amortization of the Company's term loan obligation is
reduced from approximately $636,000 of principal and interest
currently to approximately $440,000 thus freeing up approximately
$200,000 annually for expansion capital. Second, the $1.5 million
acquisition line of credit shall be interest-only at 3.65% and
variable during a draw period but, subject to certain thresholds
over the next two years, will convert into a fully amortizing four
year term loan whose interest rate would be fixed at the time of
conversion. The fixed rate would be in line with the pricing of the
four year refinanced term loan referenced above. Finally, the
$500,000 line of credit shall be for two years and interest-only at
3.65% but variable. $250,000 shall be used to replace an existing
draw on a Liberty line of credit that currently carries an interest
rate of 6.25%. The three banking facilities are subject to various
standard conditions and reporting requirements. They are also
subject to a Debt Service Coverage Ratio of 1.25 and a Minimum Net
Worth Test. People's additionally requires certain assurances on
the continuity of the business strategy and execution thereto.
The favourable terms above are made possible by the continued
guaranties of the Executive Chairman and Plain Sight respectively.
Plain Sight's charge for its guaranty will continue as currently
structured under the Liberty loan. The Chairman, meanwhile, shall
receive 600,000 Partly Paid Shares for his guaranty instead of
options as granted under the Liberty loan. These Partly Paid Shares
carry full voting rights and shall rank pari passu in all respects
with the ordinary shares but like options shall carry no economic
rights until they are fully paid at 85p per share, having been
issued nil paid. The Partly Paid Shares may not be sold,
transferred or otherwise disposed while they remain partly
paid.
Following issue of the Partly Paid Shares, Patrick DeSouza's
interest in the voting rights of the Company will be 3,442,110,
equivalent to approximately 28.5% of the issued share capital of
the Company.
As Patrick DeSouza is a director of the Company, the issue of
the Partly Paid Shares to him is a related party transaction
pursuant to the AIM Rules. The independent Directors consider,
having consulted with the Company's nominated adviser, finnCap,
that the terms of the issue of the Partly Paid Shares are fair and
reasonable insofar as the Company's shareholders are concerned.
Including the issue of the Partly Paid Shares, the issued share
capital of the Company consists of 12,073,833 shares and is divided
into 11,473,833 ordinary shares of 1 penny each which are admitted
to trading on AIM, and 600,000 Partly Paid Shares of 1 penny each
which are not admitted to trading on AIM. All shares have equal
voting rights. The Company's total issued share capital figure is
therefore 12,073,833 shares. This number may be used by
shareholders as the denominator for the calculations by which they
will determine if they are required to notify their interest in, or
a change to their interest in the Company under the FSA's
Disclosure and Transparency Rules.
Dr. Patrick J. DeSouza, Executive Chairman, commented: "We
appreciate the confidence that People's United has in our growth
strategy. Given People's scope in the US, with approximately $40
billion in assets, and its range of product offerings for our
company and for our franchisees, we seek to grow with People's on a
long-term basis."
Brandon J. McFarlane, Commercial Relationship Manager and AVP,
commented: "We are pleased to partner with Water Intelligence and
look forward to being an advocate for the Company's growth in the
future. Given Water Intelligence's broad footprint throughout the
US and UK and People's wide range of product offerings, People's is
enthusiastic about the opportunities for this partnership and we
look forward to a longstanding and mutually beneficial relationship
with Water Intelligence."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014
Enquiries:
Water Intelligence plc
Patrick DeSouza (Executive Chairman)
Tel: +1 203 654 5426
finnCap Ltd
Adrian Hargrave / Giles Rolls (Corporate Finance)
Stephen Norcross (Corporate Broking)
Tel: +44 20 7220 0500
This information is provided by RNS
The company news service from the London Stock Exchange
END
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