Post by
Phonse47 on Dec 17, 2014 7:03am
RNS
Amended Loan Agreement Wed, 17th Dec 2014 07:00RNS Number : 9657ZTurbo Power Systems Inc17 December 2014 Turbo Power Systems Inc.("TPS" or the "Company")Amended Loan AgreementTPS, the innovative electrical machines and electronic systems provider, announces an extension to its existing loan agreement with TAO Sustainable Power Solutions (UK) Limited ("Tao") (the "Existing Debt").The directors of TPS (the "Directors") have reviewed the sales pipeline and the Company enters the new financial year with optimism. Accordingly, the extension to the Existing Debt has been sought in order to support the Company's increased forecast working capital requirements in meeting increasing customer demand.Furthermore, the Directors intend to increase relevant research and development activities in the new year in a disciplined fashion, consistent with the Board's strategy of maintaining a considered approach to costs.Extension LoanTPS' wholly owned UK subsidiary, Turbo Power Systems Limited ("TPSL"), has today entered into an agreement to extend the Existing Debt provided by Tao to TPSL by a total of £0.59 million (the "Extension Loan"), bringing the total value of the TPSL's borrowings from Tao to £10.48 million. The Extension Loan will be drawn down by 31 December 2014. Neither TPS nor TPSL have any borrowings other than those from Tao.The Extension Loan represents an amendment to the agreement in respect of the Existing Debt and accordingly, the terms of the Extension Loan mirror those of the Existing Debt notably that it will be repayable on 1 April 2016, carries an annual interest rate of 6.0%, payable quarterly in arrears and be secured on the assets of TPSL.Related Party TransactionTao holds 89.4% of the issued share capital of the Company, and is therefore a related party for the purposes of the AIM Rules for Companies ("AIM Rules"). Accordingly, the entry into the agreement with Tao as set out above constitutes a related party transaction for the purpose of the AIM Rules.The Company's independent director consider, having consulted with finnCap Ltd, the Company's nominated adviser, that the terms of the transaction set out above are fair and reasonable insofar as the Company's shareholders are concerned.