By Joe Hoppe
Celadon Pharmaceuticals shares rose Tuesday after it said it has secured a 7 million pound ($8.6 million), two-year committed line of credit with a U.K.-based investor and current minor shareholder.
Shares at 0727 GMT were up 15.0 pence, or 9.4%, at 175.0 pence.
The cannabis-based medicines-focused pharmaceutical company said the facility will be used for general corporate purposes, including funding capital expenditure, and that its implementation will increase working-capital headroom.
The loan is unsecured and has no financial covenants, other than a customary negative pledge around future indebtedness and a restriction on dividends while it remains outstanding.
Any balances drawn will have a fixed interest rate of 10% a year and be payable quarterly. The line of credit will be repaid and cancelled upon either an equivalent financing, change of control or two years from signing, whichever is earliest.
The unnamed creditor is a high-net-worth investor and current shareholder, with a stake of less than 3% in the company.
“With the flexibility that the facility brings to the group, we continue to confidently pursue the conversion of expressions of interest for Celadon’s product into formal sale contracts, and build out the underlying operations required to deliver them,” Founder and Chief Executive James Short said.
Write to Joe Hoppe at [email protected]
Read the full article here
