Real Good Food gets £2m loan to continue Renshaw investment

Baking ingredients company Real Good Food has agreed a short-term working capital overdraft facility with Lloyds Bank in order to allow it to continue to invest in its Renshaw facility in Liverpool.

The “cash collaterised” facility follows an agreement with two of the listed company’s major shareholders – Napier Brown Holdings and Omnicane – to each put £1m into an account as security.

Nevertheless, investment firm Downing has said it would not subscribe to a second tranche of loan notes of £1.5m. It had an option to loan following its original investment in the business on June 29.

This follows the departure of founder and executive chairman Pieter Totté recently a week after the company, which recently invested £7m into Renshaw, issued a profit warning.

A statement from London-based Real Good Food said: “The Board considered other options that could be provided by other debt providers, however it concluded that these could take a number of weeks to arrange and that the Lloyds offer of a cash-collaterised overdraft facility backed by the shareholder loans was the most appropriate option available to meet the company’s short term requirements at this time.”

It added that Christopher Thomas, Judith Mackenzie and Hugh Cawley, the independent directors of the company, having consulted with the company’s nominated adviser, finnCap, considered the terms of the shareholder loans to be “fair and reasonable”.

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