Listed biotech business agrees revised loan facility with lender

A Leeds-based regenerative medical devices company which said it would fail a covenant test for a $20m/£16m loan has managed to renegotiate the terms of the facility with its lender.

Earlier this week, Tissue Regenix warned it would “potentially breach” a trailing 12 month revenue test for the loan it secured in June of this year.

The announcement hit the company’s share price – which slumped to 50 pence on Monday.

The loan was structured into three tranches, providing Tissue Regenix with cash until 2021. Today the business confirmed it had come to a revised agreement for both the term loan of $15m/£11.7m and the revolving credit line (RCF) of up to $5m/£3.9m.

Tissue Regenix explained: “We have renegotiated the Term Loan, agreeing an immediate repayment of $5.5m of the outstanding Term Loan.

“MidCap has agreed to waive the prepayment fee and defer a portion of the exit fee until the earlier of the date upon which the Term Loan is repaid or the maturity date.

“The remaining balance of $2m of the Term Loan currently drawn down by the company will remain in place.

“The company will continue to have access to draw down the remainder of the RCF. MidCap has agreed to suspend its testing of the financial banking covenants until 30 June 2020, when it will recommence with reduced revenue targets.

“MidCap has agreed to add the repaid $5.5m of tranche one to its commitment amount under tranche two of the Term Loan, which consisted of $5m and now consists of $10.5m.

“Access to tranche two and the final tranche of $2.5m of the Term Loan remain in place. However, the drawdown of these tranches is now subject to MidCap’s discretion and satisfactory recapitalisation of the company at that time.”

John Samuel, executive chairman of Tissue Regenix, said: “I am very pleased that Midcap have shown their support for the company by entering this revised agreement.

“There is still much to do to bring on stream new capacity but with strong demand for our products and the hard work and dedication of our employees we will continue to review our funding options.”

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