Oxford BioMedica has confirmed that the Company completed a new $55m debt facility with Oaktree Capital Management - Strategic Credit Strategy.
The facility has been used to redeem the existing debt facility with Oberland Capital Healthcare.
The loan is repayable no later than 29 June 2020 although it may be repaid, at the Group's discretion, at any time subject to early prepayment fees and an exit fee. The loan carries an interest rate of 9.0% plus US$ LIBOR, subject to a minimum of 1%. Subject to achieving certain conditions, the interest rate could reduce by 0.25% in the second year and a further 0.25% in the third year.
Under the agreement the Company will issue 134,351,226 warrants to Oaktree, equivalent to 4.4% of the enlarged Group's share capital. These warrants are exercisable at the nominal share price of 1p and may be exercised at any time over the next ten years.
Assuming that the loan is repaid on the third anniversary and that the interest rate reductions described above are achieved, with US$ LIBOR at current rates the cost of the loan including all related fees will be around 11.5%, a significant reduction from the 15% cost of the Oberland facility.
The loan will be secured over all assets of the Group, including intellectual property. The terms also include financial covenants relating to the achievement of revenue targets and the requirement to hold a minimum of $5 million cash at all times. The $10 million cash ring-fenced in a separate bank account under the Oberland agreement will be released.
John Dawson, Chief Executive Officer of Oxford BioMedica, commented:
"The new debt facility secured from Oaktree will be on significantly improved terms compared to the Oberland facility. This is a reflection of the strong progress we have made in growing our revenue-generating business, providing bioprocessing and process development services based on our world-leading LentiVector delivery platform to partner companies including Novartis."
At 3:02pm: (LON:OXB) Oxford BioMedica PLC share price was -0.76p at 6.9p