Operational and funding updat

RNS Number : 0943H
  
Cleardebt Group PLC
  
12 February 2010
  
 


ClearDebt Group Plc ("ClearDebt" or "the Company")
 
12 February 2010
 
Operational and funding update
 
On 3 December 2009 ClearDebt announced that it had acquired from the administrator (Jonathan Elman Avery-Gee) part of the businesses and assets of four subsidiaries of Relax Group plc (in administration) ("Relax"), namely approximately 6,500 Individual Voluntary Arrangements (IVAs), Protected Trust Deeds and Debt Management Plans (the "Relax Assets"). 
 
The total consideration of £2.7m for the Relax Assets was to be paid in cash from the Company's own resources and existing facilities.  To date, the Company has already paid £550,000 and will shortly be making a further payment of £1,000,000.  The Board considered various options for funding this stage payment and decided that the existing resources of the Company would be better used in growing the business and for working capital purposes.  The Board therefore decided that this further payment of £1,000,000 should be financed as to £500,000 from the Company's own resources and £500,000 from a bridging loan, detailed below.
 
The Company has entered into a bridging loan agreement dated 12 February 2010 with Synergy Capital Limited ("Synergy") to provide a loan in the sum of £500,000 on commercial terms.  
 
David Mond, Chief Executive, said "We are delighted to have Synergy on board in this exciting time for the Company.  Having an entrepreneurial investor alongside us who thoroughly understands the market in which we operate will be a great asset to the Company."  
 
The Company intends to repay this loan within 2 months by way of an issue of Convertible Loan Notes and/or the Placing of further equity raising up to £3,000,000.  A further announcement will be made in this respect in due course.
 
The balance of £1,150,000 which is due to the administrator of Relax in respect of the Relax Assets will be met from the proceeds of this new issue.
 
Contacts: 
 
For further information, please contact:
 
David Mond, CEO          ClearDebt Group plc                   Tel: 0161 969 2023
David Shalom, FD          ClearDebt Group plc                   
 
John Cowie                    Seymour Pierce Limited             Tel: 020 7107 8000 
Nicola Marrin                 Seymour Pierce Limited
 


This information is provided by RNS
The company news service from the London Stock Exchange
 
  END
 
 
FUREALAAFDDEEFF