TLA Worldwide agrees new debt facility after accounting lapses
Athlete representation and sports marketing company TLA Worldwide has agreed a renewed senior debt facility for $28.75m as it wrestles with a long-delayed set of results for last year containing fairly hefty accounting charges relating to revenue recognition issues.
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The AIM-listed company, which has promised to publish its much delayed final results for calendar 2016 and half-year numbers to 30 June 2017 by the end of November, said that the facilities with SunTrust Bank comprise an amortising term loan and revolving credit facility.
That facility includes an amended set of covenants, the group added.
Last month, after a forensic review of the group's US accounting records from 2015 to the latest half-year by an independent accounting firm, TLA said "strong evidence" emerged that former group chief financial officer Don Malter had "engaged in cash misappropriation and other unauthorised transfer of funds" worth roughly $800,000 over a three year period.
The group is in discussions with its insurers regarding the matter and said it would confirm details in its results announcement.
TLA reported early this year that there had been "issues around revenue recognition" in the US sports marketing division, that it was believed would have a total adverse impact to headline EBITDA of roughly $2m and would result in a one-off charge of $1.5m-2.5m, in June it said the impact to headline EBITDA was expected to be $3.6m and provisions against trade and other receivables are expected to result in a one-off charge of around $3.2m.
Although these these various accounting adjustments are non-cash and group net debt was unchanged at $21.8m as of 31 December 2016, the accounting adjustments impelled TLA to arrange new bank arrangements.