Business
New Financing Arrangements and Management Changes
New Financing Arrangements and Management Changes.
About this update from Cpp Group Plc
[{"type":"text","content":"\n \nRNS Number : 6122K CPPGroup Plc 31 July 2013 \n \n\nNew Financing Arrangements and Management Changes\n \n31 JULY 2013 \n \nNew Financing Arrangements\nCPPGroup Plc (\"CPP\" or the \"Group\") today announces that it has agreed new banking facilities to refinance the Group for a period of three years with its existing lenders (the \"New Facility\") and an agreement with certain of its Business Partners to defer payment of commission that would otherwise become due over the twelve months up to 30 June 2014 for a period of up to four years (the \"Commission Deferral Agreement\"). The New Facility and Commission Deferral Agreement (the \"New Financing Arrangements\") together represent longer term financing for the Group to the value of £36 million and will be used to pay redress to customers where appropriate through the proposed Scheme of Arrangement and provide working capital for the Group's three year business plan. \n \nCPP will continue to face significant financial challenges, particularly until the redress programme is completed. However, the New Financing Arrangements represent a significant milestone and create a more stable platform to support the repositioning of the Group. \n \nNew Facility\nThe total amount available under the New Facility will be £13 million and amounts borrowed under the New Facility will accrue interest at a rate per annum equal to LIBOR plus a margin of 4 per cent. The New Facility will fall due for repayment on 31 July 2016.\n \nDeferred Commissions\nThe total amount of commission to be deferred is expected to be approximately £23 million by 30 June 2014 to the relevant Business Partners with repayment due on 31 July 2017 (the \"Repayment Date\"). Interest will accrue quarterly on the deferred commission at a rate per annum equal to 3.5 per cent. and will be paid out on the Repayment Date. \n \nAdditional information to the New Financing Arrangements is outlined below. \n \nManagement Changes\nAs indicated on 16 May 2013, in line with the Group's requirement to reduce costs substantially and following completion of the refinancing Paul Stobart, CEO, and Shaun Parker, CFO have given notice under their contracts of service to step down from their respective roles once an appropriate handover period is completed. The Group is at an advanced s...