XL TechGroup enters into loan note agreement with Laurus and receives US$9.9 million cash in AgCert related transactions
21 February 2008
XL TechGroup (AIM: XLT), the creator of companies that solve identified, global unmet market needs, advises that in order to facilitate negotiations between AgCert International plc (“AgCert”) and its creditors, it has entered into a loan note agreement with Laurus Master Fund Ltd. (“Laurus”) under which XL TechGroup has agreed to pay US$17.8 million plus interest to Laurus in May 2009. In return, XL TechGroup has received US$9.9 million in cash from one of AgCert’s creditors. The new loan note carries a current interest rate of 10% and, consistent with previous borrowings from Laurus, is secured against the general assets of XL TechGroup.
The effect of this agreement has been to remove a matching amount of debt owed to Laurus by AgCert from the latter’s balance sheet, to add US$9.9 million in cash to XL TechGroup’s balance sheet (in addition to the US$11.4 million cash that the Company started 2008 with), and to leave XL TechGroup with a balancing US$7.9 million participation right from an AgCert creditor under the original debt owed by AgCert, which remains secured. XL TechGroup’s previous commitment to provide a loan of up to €5 million to AgCert in the second quarter of 2008 no longer exists and has been replaced by the secured participation right for a similar amount.
The intent of this agreement was to simplify AgCert’s relationships with its senior creditors, resulting in AgCert having only one secured creditor, thereby enabling AgCert to attempt to negotiate directly with its other creditors and customers. However, despite extensive negotiations, AgCert has been unable to reach agreement with all its creditors and customers regarding the renegotiation of contracts, and has today proposed to file a petition for examinership in Ireland. This entails a process whereby AgCert is put under the protection of the High Court in Ireland with a view to allowing a court appointed examiner to formulate and put forward for approval a scheme of arrangement with its creditors and members. The objective in petitioning for examinership is to address AgCert's obligations while maintaining an ongoing business. This action by AgCert has no impact on any XL TechGroup borrowing covenants.
John Scott, CEO of XL TechGroup, commented: “We directly involved ourselves in AgCert’s negotiations with its creditors at the end of 2007, with the single aim of looking to maximise value for all of AgCert’s shareholders. It is therefore disappointing that they have not yet reached an agreement with all their creditors and customers. However, there is now only one secured creditor and this gives us reason to continue to be optimistic that an AgCert business with value will be preserved, whether through the examinership process or otherwise.”
For further information:
XL TechGroup Inc. |
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| John Scott / Harold Gubnitsky | Tel: +1 321 409 7403 |
| hgubnitsky@xltg.com | |
| Chris Munden, Director of Investor Relations | Tel: +44 (0) 20 7398 7720 |
| cmunden@xltg.com | www.xltechgroup.com |
| Nomura Code Securities | |
| Chris Collins, Corporate Finance | Tel: +44 (0) 20 7776 1200 |
| Richard Potts, Corporate Finance | www.nomuracode.com |
XL TechGroup media enquiries:
Abchurch Communications |
|
| Heather Salmond / Gareth Mead | Tel: +44 (0) 20 7398 7700 |
| heather.salmond@abchurch-group.com | www.abchurch-group.com |
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