13 November 2019
("Brady", the "Company" and together with its subsidiaries the "Group")
New £3.0 million Loan Agreement
Brady plc, the leading global provider of trading, risk management and settlement solutions to the energy and commodities sectors, announces that its subsidiaries Brady Trading Limited and Brady Credit Trading Limited (the "Borrowers") have entered into a £3.0 million loan agreement (the "Facility") with its two largest shareholders, Coltrane Master Fund L.P. and Kestrel Opportunities (a cell of Guernsey Portfolios PCC Limited)(together the "Lenders"). Kestrel Partners LLP ("Kestrel") is acting as agent ("Agent") and security agent under the Facility.
The proceeds of the Facility will be used to repay the loan provided to Brady Trading Limited by Hanover Acquisition Limited which was announced by the Company on 11 November 2019. The balance of the proceeds will be applied to the Group's working capital requirements.
The Board believes that the Facility will provide sufficient additional funding to enable the Group to manage its working capital position until the end of January 2020 and the Facility secures the Group's short term funding requirements independent of the recommended cash offer for the Company by Hanover Acquisition Limited (the "Offer") described in an offer document dated 17 October 2019.
Should the Offer lapse, it would be essential that the Company is able to obtain additional funding before the end of January 2020 to begin to implement the Company's previously announced strategic product plan to enhance the Group's execution fundamentals and expand the Group's market reach to secure the Group's long-term competitive position and to secure the Group's long-term future. The Company remains free to arrange additional funding and the Board is currently evaluating options available to the Company in this regard.
The Facility is repayable on the earlier of: (i) 3 business days from demand by the Agent; and (ii) the date falling 12 months from the date of the Facility and is otherwise capable of repayment by the Borrowers in full without penalty at any time.
Interest will be charged on the drawn amount under the Facility at a rate of 0.5% per calendar month and a loan fee of 2% is payable on the drawn principal under the Facility, payable to the Lenders on the date falling 30 days after the date of draw down. Under the Facility, the Group has agreed to meet the costs and expenses (including legal fees not exceeding £30,000 (excluding VAT and disbursements)) reasonably incurred by the Agent in connection with entry of the Facility.
The Facility is currently unsecured. Following repayment of Brady Trading Limited's existing secured indebtedness, and release of the related security, the Company and each Borrower will grant first ranking security over all of their assets (including, and not limited to, all shares held by it in any member of the Group from time to time) to the Lenders.
Kestrel is interested in 27.4% of the Company's issued ordinary share capital and Coltrane Master Fund L.P. ("Coltrane") is interested in 19.8% of the Company's issued ordinary share capital. Under the AIM Rules for Companies (the "AIM Rules"), Kestrel and Coltrane are therefore each deemed to be related parties of the Company and the Facility represents a related party transaction under the AIM Rules. The directors of the Company consider, having consulted with the Company's nominated adviser, that the terms of the Facility are fair and reasonable insofar as the Company's shareholders are concerned.
In accordance with Rule 26.3 of the Code, a copy of the Facility will be available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, for inspection on Brady's website at https://www.bradyplc.com/recommended-cash-offer/ promptly and in any event by no later than 12 noon (London time) on the Business Day following the date of this announcement. For the avoidance of doubt the contents of that website is not incorporated into, and does not form part of this announcement.
The information contained within this announcement was deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 prior to release of this announcement. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
For further information please contact:
Carmen Carey, Chief Executive
Martin Thorneycroft, Chief Financial Officer
Telephone: +44 (0)20 3301 1200
Ben Jeynes / Cameron MacRitchie
Telephone: +44 (0)20 7397 8900
Bob Huxford / Ian Silvera / Megan Kovach
Telephone: +44 (0)20 7382 4730
Brady plc (BRY.L) is the largest European-headquartered provider of trading and risk management software to the global commodity and energy markets. Brady combines fully integrated and complete solutions supporting the entire commodity trading operation, from capture of financial and physical trading, through risk management, handling of physical operations, back office financials and treasury settlement, for energy, refined and unrefined metals, soft commodities and agriculturals.
Brady has 30 years' expertise in the commodity markets and its clients include many of the world's largest financial institutions, trading companies, miners, refiners and producers, tier one banks and a large number of London Metal Exchange (LME) Category 1 and 2 clearing members and many leading European energy generators, traders and consumers.
For further information visit: www.bradyplc.com
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