MGL
02/03/2016 12:05
GENERAL
PRICE SENSITIVE
REL: 1205 HRS Mercer Group Limited
GENERAL: MGL: Mercer funding update
March 2016
Following the preliminary half year results announcement by Mercer Group
Limited (MGL:NZX), we are pleased to report that Gresham Finance Limited
('Gresham'), an entity related to shareholder and director Humphry Rolleston,
has agreed to provide the following funding to MGL:
1. Underwriting the discount of the Mercer Interiors Limited ('MIL')
receivable for $750,000. As disclosed previously, MGL will receive $450,000
from MIL in February and 2017 and $450,000 from MIL in February 2018 as part
of the deferred consideration on the sale of the Interiors business. The use
of these funds will be as follows:
a. $500,000 to repay existing BNZ facilities
b. $250,000 for general working capital purposes
2. The provision of a $2,500,000 12-month term loan at 12% interest, secured
by way of second ranking GSA. The use of these funds is as follows:
a. $1,000,000 to repay BNZ
b. $1,500,000 for general working capital purposes.
In addition, the existing $1,000,000 Gresham loan will be restructured,
reducing the interest rate from 15% to 12%. MGL can repay all Gresham
facilities at any time with no penalty.
MGL is seeking a waiver from NZX under Rule 9.2 of the Listing Rules
(Transactions with Related Parties) which would require shareholder approval
for the Gresham funding, given Gresham is a related party. If the waiver is
not granted the Company will be unable to draw down the funding until the
necessary shareholder approval has been obtained, which will involve a delay
of several weeks. This delay would place additional stress on the Company's
working capital position for that period.
MGL is in positive discussions with BNZ and expect, with the Gresham
facilities, to be restructuring the BNZ facilities before the end of the
financial year.
As advised in the preliminary half year results announcement, the Board is
considering options relating to both the S-Clave and the Stainless businesses
with a view to releasing capital. We will advise once decisions are made and
expect this to be made before the end of the financial year.
For further information contact
Richard Rookes, CEO, 021 414 016
End CA:00278676 For:MGL Type:GENERAL Time:2016-03-02 12:05:08