Shares soar as Snacktime secures new banking facility

AIM-listed British vending operator Snacktime has concluded a revised banking agreement with the Co-operative Bank covering both its term loan and overdraft facilities.

In an update issued on Friday, the company said that it had received irrevocable commitments from certain existing shareholders and other persons to subscribe for £1.01m of new five-year unsecured loan notes.

Proceeds of the loan note issue are to be used to ensure that the company has sufficient facilities to complete the turnaround commenced in the middle of 2012 and meet its future obligations to lenders.

New bank facilityThe new bank facility comprises a two-year, £3.4m term loan, with a revised repayment schedule and covenants, and a one-year, £0.75m overdraft facility.

The new bank facility replaces a loan of £3.05m and an overdraft facility of £1.10m, originally set up in September 2010.

The company said that the revised loan repayments schedule had established a minimum loan repayment of £0.18m in the financial year ending March 31st 2014, and £0.89m in the financial year ending March 31st 2015.

The repayments required to be made by the company will increase if the company outperforms its projections. Some £2.0m of the loan attracts an interest rate of 6.0% over LIBOR, plus mandatory costs which are expected to add approximately 0.04%.

Loan note issueSnacktime said that a condition of the new bank facility was the raising of at least £1.0m, which the company said it has arranged through the issue of five-year unsecured loan notes.

It said that loan note subscribers have unconditionally agreed to subscribe for £1.01m in principal of loan notes.

The company said it would write to shareholders on the share register as at March 27th to offer them the opportunity to subscribe for loan notes on the same terms as the loan note subscribers, pro rata to their shareholding in the company, on the basis of £1.0 loan note for every 16.35 ordinary shares held at that date.

Jeremy Hamer, Executive Chairman of Snacktime, commented: "The revised covenants, rescheduled loan repayments and £1.0m of new funding all give the company a genuine opportunity to complete the turnaround process begun nine months ago."

Snacktime's share price was up 34.48% to 19.50p at 09:33 on Friday.

MF