StockMarketWire.com - Reach4Entertainment has entered into a conditional agreement with AIB Group (UK) to restructure the Company's existing £14,785,000 loan facility with AIB (the "Existing Facility") of which £200,000 was repaid in April 2015.

This was the culmination of negotiations between the Company and AIB, aimed at securing a new financial structure for the business which is in line with the size of the business and enables the Company to invest in the future.

Final settlement of the Existing Facility is subject, inter alia, to the Company securing funding to fulfil its repayment obligations under the Agreement on or prior to 30 September 2015 and the completion of the Agreement no later than 31 October 2015 (the "Completion Date").

It is anticipated by r4e that such funding will be secured through a combination of new debt facilities and the issue of new ordinary shares in the Company, and r4e has started discussions with potential lenders and investors in this regard.

Under the terms of the Agreement:

1. AIB will convert an amount equal to £5,155,000 of the outstanding principal debt due under the Existing Facility into new ordinary shares of 2.5p each in the Company ("Settlement Shares"), with the number of Settlement Shares to be equivalent to 12.5% of the fully diluted issued share capital of the Company as at the Completion Date.

2. r4e will grant to AIB a European five year put option over the Settlement Shares (which can only be exercised on the date that is five years from the date of grant) (the "Option"), which, if exercised, will result in r4e acquiring the Settlement Shares from AIB for a consideration of £2,000,000 in cash.

3. r4e will make a cash repayment of £9,430,000 in full and final settlement of the principal amount outstanding under the Existing Facility at the Completion Date (the "Principal Settlement Amount"). The Principal Settlement Amount due to be paid by r4e to AIB on the Completion Date includes a £430,000 principal repayment due on 7th October under the Existing Facility ("Principal Repayment"). Should the Completion Date fall after the due date of the Principal Repayment then the £430,000 shall be paid as due, reducing the final settlement figure to £9,000,000.

4. r4e will pay any unpaid interest accrued under the terms of the Existing Facility up until the Completion Date.

5. r4e will pay the costs incurred by AIB and r4e in connection with the Transaction, whether or not it proceeds.





Story provided by StockMarketWire.com