Symphony Environmental Technologies has renegotiated the terms of the convertible loan notes held by Headstart, which means that the degradable plastics supplier will have a stronger balance sheet.
During January 2009, Headstart had converted nearly £42,000 of convertible redeemable loan stock and related interest in to shares at 1.9p each.
Symphony has persuaded Headstart to convert a further £100,000 of loan notes at 1.9p a share and the remaining £240,000 will no longer be convertible and will be repaid over the next 12 months to February 2010. The loan notes were originally repayable on 31 March 2009.
The repayments will be made monthly and there will be an interest charge of 1.5% a month on the outstanding amount. Symphony could repay the whole amount early without any penalty.
Net debt was £1.06m at the end of June 2008. The recent conversions will cut that by £140,000 but the business has not reached the point where it is generating cash.
The conversion shares were all bought by Symphony directors at 2.09p a share. Chief executive Michael Laurier acquired just over 4.4m of the shares, taking his stake to 12.6%.
Chairman Nirj Deva was the only director not to buy any of the conversion shares but he subsequently purchased nearly 131,000 shares at 2.25p a share.
Revenues should reach £5.3m for 2008 - up from £3.78m in 2007 - although the final outcome could be even better. The weakness of the pound is good news for Symphony because most of its revenues are overseas.
If Symphony can move into profit in 2009 then it will be able to start to generate cash and reduce its debt.
At 2.25p a share, Symphony is valued at £2.5m.
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