XLTechGroup secures US$35 million borrowing facility
1/3/2006
XLTechGroup secures US$35 million borrowing facility
03 January 2006
XL TechGroup (AIM: XLT), the systematic architect and builder of an ongoing stream of high value new companies, today announces it has arranged a borrowing facility of up to US$35 million with Laurus Master Fund Ltd (“Laurus”), a New York based institutional equity fund that specialises in making direct investments in growing public companies. The facility is secured principally against XL TechGroup’s private and public equity assets, including its 27.2 per cent shareholding in AgCert International plc (“AgCert”), which is listed on the London Stock Exchange.
Under the terms of the arrangement, XL TechGroup has unrestricted access to US$25 million to fund its working capital requirements, with a further US$10 million available when XL TechGroup portfolio companies, TyraTech LLC and DxTech LLC, achieve certain financial milestones. The facility is due for repayment in three years and has a variable interest rate, which is currently 9.75 per cent, being 2.5 per cent over the US Prime Rate.
Laurus has been granted a seven year option to invest up to a total of US$7 million (being 20 per cent of the borrowing facility) in buying shares held by XL TechGroup in any of its portfolio companies. In this regard, Laurus has the option to acquire AgCert shares held by XL TechGroup at a 5 per cent premium to the AgCert share price as at 30 December 2005, or the option to acquire shares in any XL TechGroup portfolio company that seeks a stock market listing, at a 20 per cent discount to the then IPO price. From 30 June 2006, Laurus is also entitled on an annual basis to receive either cash or additional AgCert shares from XL TechGroup with a value equivalent to 6 per cent of the outstanding principal under this facility, calculated in relation to the AgCert share price at that time.
There are no conditions that would require XL TechGroup to provide additional security in the event of a fall in the AgCert share price, or to surrender any AgCert shares, save for a loan default. Laurus has agreed to be restricted by the terms of the lock-in entered into between XL TechGroup and AgCert on 3 June 2005, on any AgCert shares that may be due to it under the terms of this financing arrangement.
John Scott, Chief Executive Officer of XL TechGroup, said: “We are very pleased to have secured this funding from Laurus which will enable us to continue the development of our existing companies as well as new opportunities in our pipeline. The terms of the agreement allow us to preserve the substantial upside value we anticipate from our shares in AgCert, and to do so without giving up any XL TechGroup equity. TyraTech and DxTech are making excellent progress towards significant liquidity events within the next couple of years, and we are very excited about a number of the opportunities in our business creation pipeline.”
If you would like further information, please contact:
XL TechGroup Inc
John Scott / Harold Gubnitsky
hgubnitsky@xltg.com
Tel: +1 321 409 7403
If you have any media enquiries, please contact:
Abchurch Communications
Heather Salmond / Samantha Robbins
Tel: +44 (0) 20 7398 7700
samantha.robbins@abchurch-group.com
www.abchurch-group.com
