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- Release Date: 30/09/13 16:48
- Summary: GENERAL: SDL: Bank Debt Amendment and Capital Raising
- Price Sensitive: No
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SDL
30/09/2013 13:48
GENERAL
REL: 1348 HRS Solution Dynamics Limited
GENERAL: SDL: Bank Debt Amendment and Capital Raising
Solution Dynamics Limited
Bank Debt Amendment and Capital Raising
While SDL returned to compliance with its bank covenants prior to FY2013
financial year end, a number of customers and prospective customers have
nevertheless raised concerns around the strength of the company's balance
sheet.
The Directors believe SDL's financial position is steadily improving
following the mid-FY2013 restructure but these customer concerns create
unacceptable revenue risks to the business. Accordingly, the Directors are
taking two actions to improve the balance sheet:
1. Move a portion of SDL's bank debt from current liability to term
liability. The company's bankers have agreed to move $250,000 of SDL's debt
to a three-year, fixed-term loan. This improves SDL's working capital
position.
2. Raise $200,000 of new equity capital by way of a placement to professional
or habitual investors. The placement will be undertaken at $0.19 cents which
is approximately the six-month VWAP (volume weighted average price) and near
to the levels where recent transactions of large volumes of SDL shares have
occurred. There is no underwriting fee associated with the placement (the
only costs are legal costs).
The actions will improve the working capital position, provide balance sheet
strength comfort to existing customers and support clearly identified new
business.
In addition, and subject to both the satisfactory completion of the terming
out and a successfully completed $200,000 capital raising, the company and
group audited financial statements for the year ended 30 June 2013 are likely
to see an emphasis matter paragraph that was issued in 2012, in relation to
going concern, being removed.
The Directors believe strengthening the balance sheet, mitigating revenue
retention risk and facilitating new client revenues is an appropriate course
of action and in the best interests of all shareholders.
The process of documentation for terming out the bank debt and obtaining
commitments for the capital raising is expected to take approximately three
days.
For further information, please contact:
John McMahon Nelson Siva
Chairman Chief Executive Officer
+61-410-411 806 +64-21-415 027
End CA:00241782 For:SDL Type:GENERAL Time:2013-09-30 13:48:20
