Loan Facility (3468D)
15 May 2012 - 5:11PM
UK Regulatory
TIDMAMR
RNS Number : 3468D
Armour Group PLC
15 May 2012
Armour Group plc ("Armour" or the "Group")
Loan facility
Armour, the UK's leading consumer electronics group focused on
the in-car communications and entertainment and home entertainment
markets, announces that Hawk Investment Holdings Limited ("Hawk")
has agreed to loan the Group an additional GBP0.8 million. Armour
currently has a GBP1.2 million loan from Hawk which was announced
in July 2011.
Whilst Armour's automotive division has perpetuated its
year-on-year sales growth and increased profitability, the ongoing
weakness in consumer related markets continues to have a
significant adverse impact on the Group, particularly at Armour
Home. The actions taken by the Group's management, in response to
these market conditions, have mitigated the impact through
downsizing the Group's cost base, repositioning Armour Home and
promoting the growth of the automotive division. As announced in
the trading update on 2 May, the Group now anticipates returning to
profit in the year ending August 2013 and continues to work on
optimising its cost base and developing new markets that reduce
reliance on the UK markets currently served.
Armour has existing funding facilities with GE Commercial
Finance Limited totalling GBP16 million in aggregate of which
approximately GBP7 million had been drawn down at 30 April 2012.
These facilities provide a variable level of funding due to the
invoice discounting and inventory elements. Due to the lower than
expected level of sales, the Group has not been able to fully
utilise these facilities, and consequently, the Board has decided
to proceed with an additional GBP0.8 million loan from Hawk to
support working capital requirements.
Terms of loan
Hawk will lend the Group an additional GBP0.8 million for a
period up to 23 July 2012. The loan carries an interest rate of 1%
per month and can be repaid at any time at the request of the
Company with no early redemption cost. The loan will be secured by
way of a debenture, which will rank behind the security in respect
of the funding facilities provided by GE Commercial Finance
Limited.
Hawk is an investment vehicle controlled by ALR Morton. Hawk
owns 29.9% of the issued ordinary share capital of Armour and is
deemed to be in concert with various other parties as detailed in
the circular of 28 January 2011. In aggregate, ALR Morton and
persons acting in concert, hold 39.1% of the issued ordinary share
capital of Armour.
Due to the above shareholding and ALR Morton's position as
Chairman of Armour, the loan from Hawk is deemed a related party
transaction under Rule 13 of the AIM Rules. The Independent
Directors (being all directors excluding ALR Morton), having
consulted with the Group's nominated adviser finnCap, consider that
the proposed transaction is fair and reasonable insofar as the
Group's shareholders are concerned.
15 May 2012
Further Details:
Armour Group plc: Tel: 01892 502700
George Dexter
John Harris
FinnCap: Tel: 020 7220 0500
Geoff Nash
Ben Thompson
Stephen Norcross (Broking)
This information is provided by RNS
The company news service from the London Stock Exchange
END
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