Wynyard secures $10m short-term credit facility from shareholder Skipton

Wynyard Group [NZX: WYN] said it has secured a $10 million revolving credit facility with major shareholder Skipton Building Society which will help the crime-fighting and security software developer manage its "revenue timing risks".

The one-year facility, secured over the assets of the company, includes arrangement and commitment fees, and drawdown fees of 8 percent and an annual interest rate of 15 percent on any amount drawn down, the Auckland-based company said in a statement.

Wynyard has revamped its board and restructured into two units, while embarking on a cost-control strategy after a disappointing 2015 performance. Its shares dropped 7.5 percent to 43.5 cents today and have tumbled 76 percent this year.

Yesterday the company told the NZX that it was meeting its disclosure obligations after being asked if it knew of any reason for the recent slump in its stock price. Wynyard replied it had indicated at its June annual meeting in Auckland that "initiatives were under way to manage the potential of revenue timing risks".

Wynyard said today it has "actioned annualised cash savings of around $17 million through a combination of operating efficiencies and capital expenditure reductions".It has also "undertaken initiatives to manage revenue timing risks should they occur. This credit facility, should it be required, will help Wynyard manage the working capital needs of the business over the next 12 months."

Skipton has imposed restrictions on the facility. In order to draw down on the facility, Wynyard must meet conditions including that the board "must be confident that the company can enter into transactions sufficient to repay any amount drawn down under the facility."

"Proceeds of transactions must be applied to repayment of any outstanding amounts under the facility," Wynyard said today. "The facility also provides for certain financial covenants to be met and for certain negative undertakings to be given."

(BusinessDesk)

BusinessDesk receives funding to help cover the commercialisation of innovation from Callaghan Innovation.

Click the hamburger symbol top right of our homepage to access the Rich List 2016 and other sections.