Fulcrum agrees £6m convertible loan with major shareholders

The AIM-traded firm said the agreement of up to £6m as principal would consist of £4m from Bayford and £2m from Harwood, on a pro rata basis.

It would be repayable on or before 1 November next year, or at a later date as if agreed by the lenders.

The loan would be convertible into ordinary shares at the discretion of the lenders from 1 April, or earlier in the event of continuing default.

If converted, the price would be the lower of the volume-weighted average market value of the company's shares in the five trading days before conversion notice, or 0.5p each.

At or around the point of conversion, Fulcrum said its shareholders would be able to participate in an open offer or similar arrangement at the same price.

Interest will be accrued from the date monies were drawn under the facility at a rate of 20% per annum, repayable at the end of the term or on prepayment of the facility.

A prepayment fee of 20% of the amount of the facility prepaid early would apply, as well as a non-utilisation fee of 6% per annum.

The cash provided would be drawn in tranches as required by the company, the board said.

“Clearly the situation that the company has found itself in is disappointing,” said chairman Jennifer Babington.

“Whilst it was known that the company had legacy operational issues, these were deeper and more longstanding than anticipated.”

Babington said that, set against a “turbulent” energy market and “difficult” economic backdrop, created “deeply challenging and unprecedented conditions” for the group that could not have been predicted at the time of the fundraise in December last year.

“The facility is, however, I believe a positive demonstration of our major shareholders' continued belief and commitment in Fulcrum and an endorsement of the future potential of the business.”

At 1618 GMT, shares in Fulcrum Utility Services were down 43.32% at 1.93p.

Reporting by Josh White for Sharecast.com.