REG - KRM22 PLC - New Debt Facility

KRM22Announcement

19/06/2023 07:00

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RNS Number : 0729D  KRM22 PLC  19 June 2023

KRM22 plc

("KRM22", the "Group" or the "Company")

New Debt Facility

 

KRM22 plc (AIM: KRM.L), the technology and software investment company, with a
particular focus on risk management in capital markets, is pleased to announce
that, after a competitive process, it has entered into an agreement for a new
£5.0m convertible loan facility (the "Facility") arranged by Trading
Technologies International, Inc. ("TT"), the Company's largest shareholder.
The Company will draw down an initial amount of £4.0m under the Facility on
satisfaction of the conditions precedent set out in the loan agreement in a
single tranche and will replace the Company's existing debt facility provided
by certain affiliates of Kestrel Partners LLP ("Kestrel"). It is intended that
the balance of the outstanding debt and charges of approximately £3.1m under
the existing Kestrel debt facility will be repaid early using the proceeds of
the Facility.

 

The Facility is being provided to strengthen the Company's balance sheet and
access both working capital and growth capital in order to support the short
to mid-term opportunities available to the Company.

 

Terms of the Facility

The Facility will be for a maximum of £5.0m and will be secured on certain
Group assets and includes covenants based on the Group's financial
performance, based on annualised recurring revenue, recognised revenue and
solvency and will also be guaranteed by certain members of the Group.

 

The interest rate payable on debt drawn down is the aggregate of the SOFR
average and a margin of 5.5 per cent. provided that the minimum amount per
annum of such aggregate percentage rate per annum shall be 9.25 per cent. The
interest will be payable quarterly in arrears however the Company has the
ability to defer interest payments for the initial 18 months (the "Initial
Interest Period"), with the total deferred interest in the Initial Interest
Period being paid in two equal instalments on the calendar quarters ending
after the 18(th) and 21(st) month anniversary of the Facility. The Facility
carries an arrangement fee of 1 per cent. of the amount of debt drawn down
payable by deduction/retention from the drawn proceeds. The term of the
Facility is 3 years with the option to extend by a further year to 4 years.

 

Immediately following entry into the Facility TT can request conversion of the
Facility into up to a maximum number of 3,566,630 new ordinary shares in the
Company at any time at the lowest conversion price of: £0.46; the volume
weighted average price of the Company's ordinary shares for the 3 month period
prior to service of conversion notice; or the lowest daily closing price for
the 30 completed calendar days prior to service of conversion notice. TT has
the right to prevent any conversion which would trigger a Rule 9 event under
the Takeover Code.

 

Pursuant to the Facility, the Company has agreed that it will as soon as
practicable convene a general meeting to approve the allotment of new ordinary
shares sufficient to convert the full amount of the Facility at the conversion
price set out above. Full conversion of the Facility at a conversion price of
£0.46 would result in the issue of 10,869,565 new ordinary shares to TT. If
the Company's share price falls below £0.46 then conversion of the Facility
could result in the issue of a greater number of shares.  Pursuant to Rule 9
of the Takeover Code, TT cannot acquire 30 per cent or more of the voting
rights in the Company without being required to make a mandatory cash offer
for all the shares in the Company not already held by it. No waiver from Rule
9 is being sought in connection with the conversion right under the Facility.

 

 

Related Party Transaction

TT is considered a "related party" as defined under the AIM Rules as a result
of its substantial shareholding of 25.0 per cent. in the Company. The
provision of the Facility by TT constitutes a related party transaction for
the purposes of Rule 13 of the AIM Rules.

 

The Independent Directors, being Stephen Casner, Kim Suter, Garry Jones, Sandy
Broderick and Steve Sparke, consider, having consulted with the Company's
nominated adviser for the purposes of the AIM Rules, finnCap, that the terms
of the Facility are fair and reasonable insofar as the Company's shareholders
are concerned.

 

Stephen Casner, Chief Executive Officer commented:

 

"We are very pleased to announce this new debt facility which will continue to
fuel the strong revenue growth that KRM22 has experienced over the past 18
months.  Trading Technologies continues to demonstrate what an exceptional
partner they are for KRM22 as together we bring a new generation of risk
systems to the capital markets industry."

 

 

The information communicated in this announcement is inside information for
the purposes of Article 7 of Regulation 596/2014.

 

 

For further information please contact:

 

KRM22
plc
 
InvestorRelations@krm22.com

Keith Todd CBE, Executive Chairman

Stephen Casner, CEO

Kim Suter, CFO

 

finnCap Ltd (Nominated Adviser and Broker)                +44
(0)20 7220 0500

Carl Holmes / George Dollemore

Alice Lane / Sunila de Silva (ECM)

 

 

About KRM22 plc

KRM22 is a closed-ended investment company which listed on AIM on 30 April
2018.  The Company has been established with the objective of creating value
for its investors through the investment in, and subsequent growth and
development of, target companies in the technology and software sector, with a
focus on risk management in capital markets.

 

Through its investments and the Global Risk Platform, KRM22 helps capital
market companies reduce the cost and complexity of risk management.  The
Global Risk Platform provides applications to help address firms' trading and
corporate risk challenges and to manage their entire enterprise risk profile.

 

Capital markets companies' partner with KRM22 to optimise risk management
systems and processes, improving profitability and expanding opportunities to
increase portfolio returns by leveraging risk as alpha.

 

KRM22 plc is listed on AIM and the Group is headquartered in London, with
offices in several of the world's major financial centres.

 

See more about KRM22 at www.krm22.com (http://www.krm22.com)

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