Real Good Food's shares slump after terms for cash injection finalised
Diversified food company Real Good Food announced on Thursday that it has finalised the terms of funding arrangements with its three major shareholders.
Shareholders Omnicane Limited and Napier Brown have provided £3.3m each in exchange for secured loan notes while a number of funds overseen by Downing LLP have agreed to provide at least £1.6m, with a possibility for a further £0.5m.
The conversion price of the loan notes issued to the three shareholders is expected to be 5p, with Real Good Food’s shares currently trading at 11.25p.
The arrangements will fund the AIM traded company’s £4.5m deferred consideration due to the vendors of Brighter Foods and provide extra working capital to fund the company for the foreseeable future, including the buildup of inventory preceding the Christmas season.
In a statement, Real Good Food said: "These terms are reflective of the severe financial challenges the company has faced over the last twelve months. Without this funding the Directors believe that there was a significant risk that the Company would fail to be able to trade, but this additional financing will allow the Company to meet its obligations and trade without working capital constraint."
As of 1546 BST, Real Good Food’s shares were down 19.64% at 11.25p.