16 December 2021
Rutherford Health plc
Loan Agreement Secured
Further to its announcement of 3 December 2021, the Company confirms that discussions relating to securing bridge finance are progressing and the Company anticipates making a further announcement this week.
On 31 August 2021 Rutherford Health plc (AQSE: RUTH, the "Company"), a leading UK provider of innovative cancer care announced a placing of ordinary shares to the value of £12.35m with a new investor, SDI Holding Limited, and an agreement to acquire Proton Partners International Health Care Investments LLC in consideration for the issue of 64m ordinary shares in the Company. Neither of these transactions has completed to date.
In the announcement of the interim results for the period to 31 August 2021 the Company reported that it would require additional working capital should the SDI placing not complete and that it was exploring a number of options.
Since that announcement, the Schroder UK Public Private Trust plc (SUPPT) has engaged with certain other shareholders in the Company who have together committed to provide bridge finance (the Loan) in the form of a shareholder loan in the amount of £8m which will accrue (but not pay) interest at the rate of 15% p.a. (the Transaction). The Loan is to be repaid within six months of 15 December 2021 or on the first day after the Company has received new capital in an aggregate principal amount of £40m or more. Rutherford will provide second ranking security over all or substantially all of its assets.
The Loan will be provided in two tranches of £4.0m. The first tranche will be drawn immediately and the second tranche can be drawn down at any time in the next six months by providing five days' notice if the majority of the lenders have agreed to the making of such second tranche.
By virtue of their each having a substantial shareholding in the Company, the participation in the Transaction by SUPPT constitutes a related party transaction under Rule 4.6 of the AQSE Growth Market Apex Rulebook. It is providing £3m of bridging finance on the same terms as the other participants.
In addition, the Company received a commitment from LF Equity Income Fund (LF EIF) where it has resolved to provide a convertible loan facility of £2m (the Proposed Facility). The debt aspect of the Proposed Facility is proposed be on the exact same terms as the Loan, with two tranches of £1m each. The Proposed Facility is proposed to be convertible on the repayment date into ordinary shares of £0.001 each ("Ordinary Shares") in the Company and issued to LF EIF, at a proposed conversion price of 176 pence per Ordinary Share or otherwise will be repaid in cash at the election of LF EIF. A further announcement will be made once the Proposed Facility agreement has been signed.
In due course, the Company will post a circular to shareholders to convene a General Meeting in order to seek authority from shareholders to allot new Ordinary Shares on a non-pre-emptive basis to satisfy the terms of the Proposed Facility.
The Company intends to appoint an investment bank in due course to source additional long-term funding to strengthen the business as it grows revenues in its existing facilities. The Loan and the Proposed Facility will provide the Company with sufficient working capital for the period of the Loan while the Company sources additional long-term funding.
The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.