7digital's share price is up over 3% Monday after it said it has secured a £1 million increase to its revolving credit facility with Investec Bank.
It brings the total facility (enlarged RCF) up to £2 million.
The enlarged RCF will mature in September 2023, in line with the original terms of the RCF, which the company entered into in September 2020.
The funds drawn continue to attract interest, payable quarterly, at 6% above the bank base rate.
“This enlarged credit facility provides low-cost capital that will satisfy our cash requirements as we transition to becoming EBITDA positive,” said Paul Langworthy, CEO of 7digital.
The company will issue 5,437,883 warrants to Investec, with an exercise price of 0.55p and a life of 36 months.
The enlarged RCF is secured through guarantees provided by certain shareholders, including Tamir Koch and David Lazarus, who are board directors.
Commenting on the plans for future positive EBITDA, Langworthy said: “As we stated in our interim results, we have new contracts representing significant revenue that are just awaiting signature. While this is taking longer than originally anticipated, we expect they will be finalised in the near-term and enable us to generate positive EBITDA for the full year of 2022.”
7digital shares are trading at 0.492p in the early part of the London session, up3.68% from Friday's close. However, its stock price is down just under 59% for the year to date.
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