REG - Trafalgar PropertyGp - Debt Consolidation

Trafalgar PropertyAnnouncement

11/07/2022 07:00

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RNS Number : 9262R  Trafalgar Property Group PLC  11 July 2022

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 ("MAR").  With the publication of this announcement via a
Regulatory Information Service, this inside information is now considered to
be in the public domain.

 

TRAFALGAR PROPERTY GROUP PLC

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

 

Consolidation and variation of terms of convertible loan notes and debt

 

Trafalgar (AIM:TRAF), the AIM quoted residential and assisted living property
developer, announces that Christopher Johnson a substantial shareholder in the
Company and a director of one of its subsidiaries, Trafalgar New Homes
Limited) has agreed to a consolidation and variation of the terms of his two
unsecured convertible loan notes and director loan held by him. The conversion
of the total amount owed to him by the Company (£905,000) will result in the
issue to Christopher Johnson of a new unsecured convertible loan note (the
"New CLN") for an aggregate amount of £905,000. This replaces:

·      the £600,000 unsecured convertible loan note issued on 13 July
2020, which would have been redeemable on 31 July 2022, and which was
convertible at 0.2p per share (now 2p following the share consolidation on 29
December 2020). It carried the right, upon a conversion of the loan note, to
the grant of warrants to subscribe for ordinary shares on a one for one basis,
exercisable at the conversion price of 2p for a period of two years from the
date of grant;

·      the £200,000 unsecured convertible loan note comprising a loan
facility entered into on 22 November 2021, which is redeemable on 30 November
2022, and which is convertible at 0.7p per share; and

·      £105,000 owed to him by the Company on directors loan account.

The New CLN will be convertible in full into 226,250,000 Ordinary Shares at
0.4p per ordinary share (a 29 per cent. premium to the mid-market closing
price of 0.31p on 8 July 2022) and can be converted at any time by Mr Johnson,
subject inter alia to his entire holding being less than 29.99 per cent of the
voting rights in issue in the Company.

The New CLN carries the right, upon a conversion, to the grant of warrants to
subscribe for ordinary shares on a one for one basis, exercisable at the
conversion price for a period of two years from the date of grant.

The Company does not currently have sufficient authority to allot securities
to satisfy a conversion of the New CLN, and has agreed to convene a general
meeting to seek such authorities before 31 October 2022.  Mr Johnson has
agreed not to exercise conversion rights under the New CLN until the Company
has obtained sufficient authorities.

The New CLN represents a material extension of the redemption dates under the
previous convertible loan notes, improving the Company's cash flow position,
which the Company has agreed with Mr Johnson in consideration for the other
variations in the terms of the New CLN, namely the reduction in conversion
price.

Following the issue of the New CLN, the Company will have no indebtedness to
Mr Johnson other than under the New CLN.  Trafalgar New Homes Limited
("TNH"), the principal operating subsidiary of the Company, remains indebted
to Mr Johnson under its loan agreement with him ("TNH Loan") in the current
approximate amount of £2,204,650.  TNH makes repayments or drawings under
the TNH Loan periodically, depending upon its working capital requirements.

 

Related Party Transaction

As Christopher Johnson is a substantial shareholder in the Company and a
director of one of its subsidiaries (Trafalgar New Homes Limited), the issue
of the New CLN therefore constitutes a related party transaction under Rule 13
of the AIM Rules for Companies.  The Directors of Trafalgar, all of whom are
independent in respect of the related party transaction, consider, having
consulted with SPARK, the Company's Nominated Adviser, that the issuance and
terms of the New CLN are fair and reasonable insofar as the Company's
Shareholders are concerned.

 

 

Enquiries:

 Trafalgar Property Group plc                             +44 (0) 1732 700 000

 James Dubois
 SPARK Advisory Partners Limited - AIM Nominated Adviser  +44 (0) 203 368 3550

 Matt Davis
 Peterhouse Capital Limited - Broker                      +44 (0) 20 7409 0930

 Duncan Vasey/Lucy Williams

 

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