Reach4entertainment agrees variation on finance with PNC
By Josh White
Date: Thursday 20 Jul 2017
(ShareCast News) - Media and entertainment company reach4entertainment has agreed a variation of the covenants on its three-year secured asset base facility with PNC Business Credit, it announced on Thursday, which it said reflected the shift in the weighting of its revenues in 2016 and 2017, which affected the 12-month rolling covenant test.
It said the variation of the covenants agreement followed on from the statement in its full-year results announced in April, concerning potential breaches of one of the covenants due to the "unusual weighting" of revenues towards the first half of 2016.
"With the revised covenants now accommodating this change in revenue weighting, a breach is not expected to occur," r4e's board said in its statement.
"The company has met all the covenants to date in 2017."
In addition, reach4entertainment said it was able to repay its cash flow term debt facility of £553,081 with PNC.
Repayment was reportedly made from unutilised proceeds from the October 2016 share placing, which had not been required for investment into the company's new initiatives as a result of those initiatives performing better than expected in 2017.
"The repayment will result in reduced interest costs in 2017," the board explained.
"The monies used to repay the cash flow term debt facility are expected to be replaced over the course of the next 12 months from the cash flows of the subsidiary companies to provide further investment for the ongoing or new initiatives."
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