RCS - Literacy Capital PLC - Refinancing and extension of the fund’s RCF

Literacy CapitalAnnouncement

23/09/2024 07:00

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RNS Number : 1165F  Literacy Capital PLC  23 September 2024

The information contained in this announcement is restricted and is not for
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member state of the European Economic Area, Canada, Australia, Japan or the
Republic of South Africa.

 

This announcement contains inside information.

 

23 September 2024

Literacy Capital plc

 

Refinancing and extension of the fund's Revolving Credit Facility

 

Literacy Capital plc ("Literacy", "BOOK" or the "Company"), a listed
investment trust primarily focused on investing directly into private,
UK-based businesses, announces a new Revolving Credit Facility ("RCF") with
OakNorth Bank plc ("OakNorth"):

 

·    Literacy has replaced its existing £30m RCF, which was due to expire
in December 2024, with a new facility provided by OakNorth.

 

·    The new RCF has a three-year term, which will expire in September
2027, and provides Literacy with up to £40m of funding. £30m is fully
committed, with an incremental £10m also available, which Literacy can
utilise during the life of the RCF.

 

·    The new RCF has several benefits for Literacy and its shareholders.
It extends the term of the fund's RCF until 2027, whilst also providing
additional capital and flexibility, at a lower cost than the existing
facility.

 

Commenting on the new debt facility, CEO of BOOK's investment manager, Richard
Pindar, said:

 

"We are pleased to agree a new debt facility for the fund, which will support
Literacy and its investment activity over the medium term to continue
delivering leading NAV performance and shareholder returns. It is testament to
the maturity and growth achieved by Literacy that several competitive
proposals were received from lenders, all of which offered more attractive
terms than the original facility put in place in 2021.

 

We are encouraged by the large number of high-quality founder-led businesses
in the UK and we continually appraise these new investment opportunities. We
also continue to assess options regarding re-financing or selling portfolio
companies to generate cash and recycle capital into newer investments."

 

Debt Refinance

 

Literacy has refinanced the fund's existing £30m RCF facility with Investec
Bank plc. The new facility, provided by OakNorth, offers additional capacity
(given its £40m limit) and flexibility for Literacy to continue its
investment activity.

 

We are grateful for the support provided by Investec since 2021, which helped
Literacy to deliver its leading NAV performance and returns for shareholders,
during the life of this facility. We appreciate the speed with which OakNorth
have completed this transaction and look forward to working together over the
next three years.

 

The new RCF has a three-year term, meaning it expires in September 2027,
providing a solid foundation for Literacy to continue making new investments
and to support the existing portfolio. The cost (including margin,
non-utilisation fees and arrangement fees) of the new facility is lower than
the one that it replaces, whilst it also has greater flexibility for Literacy.

 

The loan-to-value ("LTV") financial covenant remains unchanged at 20%. The
Company expects gearing to remain conservative throughout the term of this
facility and it is considered unlikely that the LTV would exceed 10% for a
sustained period of time.

 

 

-ENDS-

 

 

For further information, please contact:

 

Literacy Capital plc / Book Asset Management LLP

Tom Vernon / Richard Pindar

+44 (0) 20 3960 0280

 

MHP Group

Reg Hoare / Ollie Hoare / Matthew Taylor

book@mhpgroup.com

+44 (0) 7817 458804 / + 44 (0) 7827 662831

 

Singer Capital Markets Securities Limited

Robert Peel

+44 (0) 20 7496 3000

 

About Literacy Capital plc

 

Literacy Capital (BOOK.L) is a closed-end investment company that was
co-founded by Paul Pindar and Richard Pindar in 2017 with £54m of capital.
Literacy listed on the London Stock Exchange's Main Market in June 2021,
before gaining Investment Trust status on 1 April 2022. The Company focuses on
opportunities to invest for the long-term in growing private businesses where
a clear route to creating additional value can be seen with its support.

 

It also has a unique charitable objective, to donate 0.9% of annual NAV to
charities focused on improving UK literacy in children. £10.0 million has
been donated or reserved for donation to charities since the trust's creation
in 2017. For more information, please visit our website:
www.literacycapital.com
(https://protect.checkpoint.com/v2/___http:/www.literacycapital.com___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzpkYTNjNDFmNTRkY2I5ODAzOTMxYjcxZGVlNDgzNzdmOTo2OjYzNDc6YzNjYTRmNDljOTZjOWZiYzdlMGJjZjEyNTgzNzZiODhhMDcwNGNhOWZjM2YyYWU1NzQ0MDUwN2JkZjQ3ZTUwNjpwOkY6Tg)
.

 

A copy of this announcement will be available on the Company's website at
www.literacycapital.com
(https://protect.checkpoint.com/v2/___http:/www.literacycapital.com___.bXQtcHJvZC1jcC1ldXcyLTE6bmV4dDE1OmM6bzpkYTNjNDFmNTRkY2I5ODAzOTMxYjcxZGVlNDgzNzdmOTo2OjYzNDc6YzNjYTRmNDljOTZjOWZiYzdlMGJjZjEyNTgzNzZiODhhMDcwNGNhOWZjM2YyYWU1NzQ0MDUwN2JkZjQ3ZTUwNjpwOkY6Tg)
.

 

LEI: 2549006P3DFN5HLFGR54

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