Vector Capital Plc (LON:VCAP), a commercial lending group that offers secured loans to property developers and investors in England & Wales, has provided an update on the Group’s loan facilities, including those provided by Vector Holdings Limited.
Extension of wholesale banking facilities
The Board is pleased to announce that the Company’s wholesale bank debt providers have increased debt facilities by £5.0 million, bringing the total wholesale bank facilities available to the Group to £45.0 million.
Within these overall wholesale bank facilities, the Group now has the capacity to drawdown £2.5 million toward loans secured by second charges, thereby allowing the flexibility for cautious and selective expansion of the Group’s loan book into higher margin loan agreements.
Extension of loan facilities provided by Vector Holdings
On 29th December 2022, the terms of an inter-company debt agreement with Vector Holdings for a £3 million loan (the ‘Vector Holdings Liability’), entered into on 12 November 2020, were extended. The key terms of the extended debt agreement included:
| · | Interest will be payable on the outstanding balance of the Vector Holdings Liability at a rate of 6.25 per cent. per annum accruing daily and payable quarterly on the last business day of March, June, September and December; and |
| · | The Vector Holdings Liability is unsecured and is repayable on 31 December 2024. |
Under the terms of a Relationship Agreement dated 18th December 2020, Vector Holdings undertook not to demand repayment of the whole or any part of the Vector Holdings Liability without the prior written consent of at least two independent directors, except in the event of an insolvency.
At a Company board meeting on 9th June 2023, the Board of Vector Holdings has agreed to increase the amount of the loan facility from £3 million to £4 million, with all other terms relating to the intercompany debt and the Relationship Agreement remaining unchanged.
The revised terms of the loan provide the Company with access to very competitively priced finance, significantly below the rate currently offered by third party funders, to be employed to increase the loan book at higher margins.
Related Party Transaction
Vector Holdings is the parent company of the Group and holds a 75% interest in the Company. Mr. Agam Jain, a director of Vector Capital, is a controlling shareholder of Vector Holdings along with his immediate family. Accordingly, the extension of the inter-company debt is deemed to be a related party transaction pursuant to AIM Rule 13 of the AIM Rule for Companies.
The Company’s Directors (excluding Mr. Agam Jain, who is directly related to this transaction), having consulted with Vector Capital’s Nominated Adviser, WH Ireland Limited, consider the extended terms of the loan to be fair and reasonable in so far as the Company’s shareholders are concerned.
Agam Jain, CEO of Vector Capital, added: “We are very pleased to announce the extension and broadening of our wholesale debt facilities and the extension of competitively priced debt facility from Vector Holdings. These facilities, combined with our resilient pipeline of new loan opportunities and the strength of our loan management systems, provides a base from which to target future growth as interest rates stabilise.”
