Supply@Me Capital PLC (LON: SYME) shares fell 5% after securing a new short-term loan facility worth up to £7 million to replace the subscription agreement signed with Negma Group.
The inventory monetisation company clarified that it has agreed to a new short-term loan facility with Mercator Capital Management Fund LP (“Mercator”) following the signing of term sheets on September 2, 2021.
SYME was introduced to Mercator, a Cayman regulated fund, by ARC Group, an investment bank specialising in middle markets with a global presence on all continents. ARC Group connects its clients with funding solutions from institutional investors.
The short-term loan facility is a welcome relief for investors compared to the subscription agreement with Negma group, given that shareholders do not have to worry about being significantly diluted from now on.
SYME issued 840 million new shares on 16 June 2021 to Negma Group as part of the subscription agreement, significantly diluting existing shareholders at the time.
The company still owes £2,016,000 to Negma Group as part of the convertible loan notes agreement, which it will now settle in cash from the short-term loan facility.
The terms of the loan facility allow SYME to have an initial drawdown of £5 million, with an additional £2 million available within the next 60 days, subject to certain conditions.
SYME will issue warrants worth 20% of each tranche with a 3-year term from the date of issue and a 130% exercise price of the value of the lowest closing VWAP in the last ten trading days.
“We are delighted to finalise our agreement with Mercator Capital Management Fund. The funds will increase our balance sheet flexibility and ensure we are well funded as we continue our business expansion,” said Alessandro Zamboni, Supply@ME Capital’s CEO. “We are hugely grateful to ARC for introducing us to a high-quality funding partner.”
SYME share price.
SYME shares surged 4.16% to trade at 0.26p, rising from Tuesday’s closing price of 0.25p.