REG - Duke Royalty Limited - Refinance and Upsize of Credit Facility

Duke CapitalAnnouncement

12/12/2022 07:00

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RNS Number : 2929J  Duke Royalty Limited  12 December 2022

12 December 2022

 

Duke Royalty Limited

 

("Duke Royalty", "Duke" or the "Company")

 

Refinance and Upsize of Credit Facility to £100 million on

Improved Terms with Fairfax Financial

 

Duke Royalty, a provider of alternative capital solutions to a diversified
range of profitable and long-established businesses in Europe and North
America, is pleased to announce that it has entered into a new £100 million
credit facility agreement (the "New Credit Facility") with Fairfax Financial
Holdings Limited and certain of its subsidiaries ("Fairfax").

 

The material terms of the New Credit Facility are as follows:

 

·         Term facility of up to £100 million to replace Duke's existing
£55 million term and revolving facilities

·       Five-year term, expiring in January 2028 with a bullet repayment
on expiry and no amortisation payments during the five-year term

·         Interest rate equal to SONIA plus 5.00% per annum, which
represents an improvement of 225bps on Duke's existing rate of SONIA plus
7.25%

·         As part of the deal, Duke will issue 41,615,134 warrants to
Fairfax with a five-year maturity and strike price of 45 pence reflecting the
strategic nature of the deal

·       Initial drawdown of the New Credit Facility expected to occur
in mid/late January 2023 coinciding with the expiry of the non-call period
enshrined in Duke's existing credit facilities

 

The New Credit Facility will provide Duke with a significant amount of
additional liquidity and will push out the Company's requirement for
additional equity capital. Furthermore, the New Credit Facility comes at a
lower cost to the Company's existing credit facility thereby having an
immediate and material impact on the free cash flow of the Company.

 

Neil Johnson, CEO of Duke Royalty, said:

 

"I am delighted to announce this upsized credit facility with Fairfax on
improved terms for Duke shareholders. Fairfax is an internationally recognised
and well respected company. Both Duke and Fairfax have similar philosophies of
investing in a supportive way over the long term and I believe that this is
the start of a long standing and mutually beneficial relationship.

 

"The upsizing of the New Credit Facility will allow Duke to accelerate its
growth and deployment schedule without any near-term equity dilution. More
strategically, Fairfax and Duke believe our partnership can benefit more
businesses looking for long-term, flexible capital solutions by increasing
Duke's capital base and diversification, as well as benefit Duke's
shareholders through higher free cash flow per share."

 

Prem Watsa, Chairman and CEO of Fairfax, said:

 

"We are impressed with the degree to which Duke's investing philosophy aligns
with our own - focusing on lending to established, profitable,
cash-generating, well-managed companies, with incentivised management teams.
We are delighted to be partnering with Duke and believe that there is a large
group of companies that can benefit from Duke's long-term flexible support."

 

 

 

 

About Fairfax Financial Holdings Limited

Fairfax Financial Holdings Limited is a holding company which, through its
subsidiaries, is primarily engaged in property and casualty insurance and
reinsurance and the associated investment management. Fairfax is headquartered
in Toronto, Canada and its common shares are listed on the Toronto Stock
Exchange under the symbol FFH and in U.S. dollars under the symbol FFH.U.

 

***ENDS***

 

For further information, please visit www.dukeroyalty.com
(http://www.dukeroyalty.com) or contact:

 

 

 Duke Royalty Limited     Neil Johnson / Charles Cannon Brookes / Hugo Evans  +44 (0) 1481 730 613

 Cenkos Securities plc    Stephen Keys / Callum Davidson / Michael Johnson    +44 (0) 207 397 8900

 (Nominated Adviser

 and Joint Broker)

 Canaccord Genuity        Adam James / Harry Rees                             +44 (0) 207 523 8000

 (Joint Broker)

 SEC Newgate (PR)         Elisabeth Cowell / Axaule Shukanayeva               +44 (0) 20 3757 6882 dukeroyalty@secnewgate.co.uk

 

About Duke Royalty

Duke Royalty Limited provides alternative capital solutions to a diversified
range of profitable and long-established businesses in Europe and abroad.
Duke Royalty's experienced team provide financing solutions to private
companies that are in need of capital but whose owners wish to maintain equity
control of their business. Duke Royalty's royalty investments are intended to
provide robust, stable, long term returns to its shareholders. Duke Royalty is
listed on the AIM market under the ticker DUKE and is headquartered in
Guernsey.

 

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