New Bank Loan Facility
At the time of the Interim Results, released on 24 July 2013, the Company reported that the Group was negotiating a new £10.0 million term loan facility. This negotiation has now been completed successfully.
The loan, agreed with Lloyds TSB Bank plc (‘Lloyds’), is for a term of five years, with £5.0 million amortising and the remaining £5.0 million repayable at term. It is secured solely on the freehold property at Harston and subject to maintaining cash balances in excess of £2.0 million, the loan is not subject to operating covenants on the consultancy business.
This loan replaces the previous facility which was due to expire in October 2015 and on which there was an outstanding balance of £5.8 million. The new loan will be used to pay down the outstanding balance on the previous loan.
The Group has also entered into a five year interest rate swap, the effect of which is to fix the interest rate on the new loan at approximately 3.89 per cent; a reduction on the fixed rate of 4.71 per cent in place on the previous loan. The Group has cancelled the previous interest swap at a one-off cost of £166,000, the charge for which will be recognised in 2013.
The freehold property at Harston was last valued in July 2010 by Savills for Lloyds. As part of the refinancing the freehold property was re-valued by Savills in August 2013. Under the assumptions used, including tenant covenant strength and market rents, the indicative valuation range for the building was between £12.9 million (2010: £11.9 million) based on occupational tenancies, and £18.0 million (2010: not less than £14.0 million) under a sale and leaseback scenario. The Board are not intending to adjust the carrying value of the property on the balance sheet at the present time.
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For further information:
Sagentia Group plc
Martyn Ratcliffe, Executive Chairman
Tel: +44 (0) 1223 875 200
Neil Elton, Finance Director
Numis Securities Limited
Nominated Adviser: Oliver Cardigan / Simon Willis
Corporate Broking: James Serjeant
Tel: +44 (0) 20 7260 1000
Henry Harrison-Topham / Jamie Hooper
Tel: +44 (0) 20 7398 7719