18th Dec 2015 09:50
LONDON (Alliance News) - eServGlobal Ltd on Friday said it needs to draw down more money under a GBP5.0 million facility with funds managed by Henderson Global Investors in order to repay money owed to National Australia Bank, but there are complexities in managing the situation.
The mobile payments company faces a conundrum because it cannot draw down further funds under the facility while National Australia Bank remains a secured creditor.
As a result, eServGlobal wants shareholders to give it the authority to put up its assets as security with Henderson in order to "facilitate the discussion" over a request to temporarily waive that condition of the facility, paving the way for the drawdown to be made before March 31, 2016, when it must repay AUD3.0 million owed to National Australia Bank.
The company is seeking shareholder approval at a meeting to take place on January 18, 2016 in Sydney.
An October 5 deal saw eServGlobal secure a GBP5.0 million loan facility from Alphagen Volantis Fund Ltd and the Alphagen Volantis Catalyst Fund Ltd, both of which are managed by Alphagen Capital Ltd, in turn owned by Henderson Global Investors, which also owns 17.5% of eServGlobal.
The first tranche of GBP2.5M was drawn down on October 9 and an additional GBP2.5 million is available for drawdown prior to June 30, 2016. eServGlobal had already borrowed GBP5.0 million from Henderson prior to the October facility, meaning it owes the investor GBP7.5 million.
The second drawdown is subject to both shareholder approval and the approval of the lenders. eServGlobal expects to require the second tranche of the facility before March 31, 2016, partly for working capital requirements and also to repay the AUD3.0 million borrowed from the National Australia Bank due on that date.
eServGlobal said the National Australia Bank has refused to grant its consent to the granting of security to the lenders, being the Henderson funds, meaning their loans remain unsecured over the company's assets. Currently, the National Australia Bank has a fixed and floating charge over all the assets of eServGlobal, and ranks above Henderson in that regard.
"Accordingly, no security will be granted to the lenders until such time as the National Australia Bank grants its consent, or the loan from the National Australia Bank is repaid," according to eServGlobal, which does not expect the bank to rollover the loan.
Meanwhile, eServGlobal's partners in its HomeSend remittances hub joint venture, MasterCard and BICS, have not consented to permit eServGlobal's shareholding to be granted as security to any secured creditor. Until their consent is obtained, eServGlobal said, its shares in HomeSend will not form part of the security for any of its borrowings.
The shares in the HomeSend JV owned by eServGlobal SAS are in the process of being transferred to eServGlobal (NZ) Pty Ltd, a wholly owned Australian incorporated subsidiary of eServGlobal Ltd, the company said.
Shares in eServGlobal were down 22% at 3.60 pence on Friday morning.
By Samuel Agini; [email protected]; @samuelagini
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