Hi Melody432,
Agree with you that the terms of the loan are probably as good as the likes of Avita could expect.
I'm no expert financier and I always find those documents next to impenetrable to read and stay focused....was just looking for the repayment terms and stopped when I found the section about monthly repayments.....
I guess when it comes down to it, we have to ask ourselves is Avita able to get a return on the invested capital from the loan that is greater than the cost of that capital (currently 13.3%). Their margins would suggest that they are but sometimes I wonder if it wouldn't have been better to wait until after the Q3 results, and if they were good, go for an equity raise limited to holders only and take some dilution.
Maybe that answers the question - if they already know the Q3 results aren't going to shoot the lights out then the loan is probably the better option.
Ann: AVITA Medical Q3 Revenue & Secures $90M Non-Dilutive Debt, page-23
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