LONDON (ShareCast) - (Sharecast News) - Education and skills company Malvern International has entered into a loan agreement with Boost & Co for working capital purposes, to repay a shareholder loan and to fund the continued development of the group, it announced on Tuesday.
The AIM-traded firm said that, subject to certain terms of the loan agreement, Boost had agreed to make available to Malvern a cash advance facility comprising two tranches.

It said the first tranche of £2.6m would be drawn in full immediately, with an optional second tranche of up to £4m to be available to the group to fund a permitted acquisition, subject to conditions.

Interest on the amounts drawn down would be charged as the higher of either 10% per annum, or 8% per annum plus LIBOR, calculated on the relevant drawdown date and then monthly on each repayment date.

The first 12 months following each drawdown would be interest-only periods, where no capital repayments could be made.

Thereafter, the capital, together with accrued interest, would be repayable in equal instalments over 48 months.

Malvern said the amounts drawn down would be secured by way of debentures constituting the first fixed and floating charges over the group's assets in the UK and Singapore, including fixed charge security over the shares held in each English subsidiary of the company.

An arrangement fee of 1.25% would be payable on the drawn down amounts, with the arrangement fee of the first tranche being paid on the signing of the loan agreement.

In addition, the lender would entitled to warrants calculated at 12% of the drawn down amount, divided by the 28-day average share price preceding the date of draw down.

Therefore, in connection with the first tranche, Malvern said it would be issuing warrants over around 12.2 million shares.

Those warrants would be exercisable at the strike price at any time over the following 10 years from the date of drawdown.

There was also an option for the warrants to be exercised on a cashless basis, that would result in fewer shares being issued to satisfy the warrants.

Part of the net proceeds of the first tranche would be used to repay a shareholder loan of £0.56m owed to KSP Investments - the company's largest shareholder.

"We are pleased to have secured this loan facility from Boost which will provide additional cash resources to support the group's continuing growth and strategic development and enable us to accelerate rollout of some of our new products," said Malvern International chief executive officer Sam Malafeh.

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE