XL TechGroup secures US$20 million mezzanine borrowing facility
1/9/2007
XL TechGroup secures US$20 million mezzanine borrowing facility
09 January 2007
XL TechGroup (AIM: XLT), the systematic architect and builder of an ongoing stream of high value new companies, announces that it has arranged a mezzanine borrowing facility of US$20 million with Laurus Master Fund Ltd ("Laurus"), a New York based institutional equity fund that specialises in making direct investments in growing public companies. This facility is in addition to the US$35 million facility previously arranged with Laurus that was announced on 3 January 2006, and is a result of the growing strategic relationship between XL TechGroup and Laurus.
The facility, secured against XL TechGroup's assets, is due for repayment in three years and has a variable interest rate, being the US Prime Rate, which is currently 8.25 per cent per annum, plus an up-front, one-off facility arrangement fee of 3.65 per cent. At XL TechGroup's election, Laurus is also entitled, on an annual basis, to receive either cash or shares in XL TechGroup's companies or in XL TechGroup itself, with a value equivalent to 13 per cent of the outstanding principal under this facility at the time. There are no conditions that would require XL TechGroup to provide additional security in the event of a fall in the Company's share price, or to surrender any shares, save for a loan default, and XL TechGroup has a pre-payment option without penalty.
XL TechGroup's stated business strategy, which has been successfully developed over fourteen years, is to achieve periodic large-scale liquidity events from the managed sale of its interest in XL TechGroup companies. These events occur when XL TechGroup believes it has achieved the best mix of a strong valuation for each company and sufficient further upside for new shareholders. In the meantime, XL TechGroup raises working capital funds by leveraging these Company assets to secure reliable, cost-effective financing for the development and scaling needs of both existing XL TechGroup companies and future prospects in the pipeline.
As a further demonstration of the growing relationship with Laurus, XL TechGroup's portfolio company, AgCert International plc (LSE: AGC), announced on 5 January 2007 the completion and funding of a senior, secured US$25 million debt facility provided by Laurus.
John Scott, Chief Executive Officer of XL TechGroup, said: "We are delighted to have secured this additional, competitively priced funding from Laurus, who share our excitement about XL TechGroup's future. These funds will enable us to continue the development of our companies, including the recently announced QuoNova, as well as further opportunities in our pipeline, without having to sell AgCert shares in the market when we believe they are currently significantly undervalued, and without having to dilute existing shareholders."
For further information:
XL TechGroup Inc.
John Scott / Harold Gubnitsky Tel: +1 321 409 7403
hgubnitsky@xltg.com www.xl techgroup.com
Chris Munden, Director of Investor Relations Tel: +44 (0) 20 7398 7720
cmunden@xltg.com
XL TechGroup media enquiries:
Abchurch Communications
Heather Salmond / Gareth Mead Tel: +44 (0) 20 7398 7700
heather.salmond@abchurch-group.com www.abchurch-group.com
