11th Jun 2025 15:01
(Alliance News) - Celadon Pharmaceuticals PLC on Wednesday said it had received GBP500,000 in funding from an anonymous lender.
The London-based pharmaceutical company grows medical cannabis for the chronic pain market. Celadon said it has entered a one-year unsecured credit facility with a "European-based high net worth individual".
This comes after Celadon's announcement on Friday that it would go into administration if funds were not secured within a week. Also on Friday, Celadon said it did not expected funding from an existing lender to continue in future.
The company's shares jumped 23% to 16.00 pence each in London on Wednesday afternoon, after Celadon secured the additional funding.
The new loan includes a 10% per annum fixed interest rate for funds drawn, payable on a quarterly basis, and will be used for general corporate purposes.
It has no financial covenants other than standard disclosures, a negative pledge on Celadon's part related to future indebtedness and restrictions on major changes to the business while the loan is outstanding. The loan will be repaid and cancelled on the earlier of either debt or equity financing sufficient to repay it, upon a change of control or upon the loan's expiry.
Celadon's directors said this gives the company enough cash to see it through to July, dependent on further funding and stakeholder support.
The new loan is in addition to an existing unsecured GBP7.0 million credit facility. Celadon has a waiver from the existing lender confirming that no funds can be drawn from the new loan to repay the old one. Celadon also promised the old lender that its total debt will not exceed GBP7.0 million for the term of the old loan. As of Wednesday, the company has drawn down GBP1.0 million of that loan, repayable by November 30. Celadon on Wednesday reiterated that funding from this facility will not continue in future.
The company said it was negotiating with a further loan provider, "who has concluded due diligence and who has indicated he is in the process of making funds available".
Back in March, Celadon announced plans to exit AIM trading in London. Also in March, the firm reported difficulty receiving payments from its existing loan agreements.
The company maintains it will delist after securing more funds and will provide an update "in due course".
By Holly Munks, Alliance News reporter
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