FireAngel secures £3.2m through Covid loan scheme

FireAngel Safety Technology updated the market on its Coronavirus Large Business Interruption Loan Scheme (CLBILS) application on Monday, reporting that it has secured funding of £3.2m through its existing bank, HSBC UK.

The AIM-traded firm said the loan has an annual interest rate of 2.66% over LIBOR.

In line with the expected unwinding of its working capital position, £0.9m would be repayable in instalments during the rest of the current year, and £2.3m in instalments in 2021.

FireAngle said its strong sales performance in early 2020, in line with its budget expectations, necessitated purchase commitments to meet the expected trajectory of future sales.

The reduction in sales in the second quarter due to the impact of the Covid-19 pandemic had led to temporarily increased stock levels in the short term, and a reduction in funding being available through its invoice discounting facility with HSBC UK.

Securing the CLBILS loan, together with the net proceeds of its recent equity fundraising, would strengthen the company's ability to work with its suppliers through the challenges of shaping procurement demand “with the right level of confidence”, the board said, despite the disruption caused by the coronavirus.

“Like most businesses with a procurement cycle which requires commitments to be made months ahead of expected sales, we want a stable platform from which to shape further procurement decisions while maintaining constructive relationships with suppliers as normality begins to return to our markets,” said executive chairman John Conoley.

“We have a strong relationship with our bankers and are grateful to HSBC UK for recognising the temporary impact of reduced sales on funds available through the invoice discounting facility and, in effect, substituting this with a CLBILS loan.”