- Buddy Technologies (BUD) has closed on a US$20 million (roughly A$26.1 million) loan facility with a San Francisco-based lender
- The lending consists of two loans — one is a term loan while the other is a revolving line-of-credit
- A large portion on the new loans will be used to pay down existing vendor loans as part of an agreement reached last October
- Buddy stock has been on a wild ride, fluctuating over 1500 per cent in the past year
- BUD shares are down 3.85 per cent trading at 5 cents
Buddy Technologies (BUD) has closed on a US$20 million (roughly A$26.1 million) loan facility with San Francisco-based Partners for Growth.
The lending consists of a US$10 million term loan (around A$13.05 million) and the same amount by way of a revolving line-of-credit. The funds will be used to fund the working capital and growth needs of the business.
The loan details
Buddy has reported details of the loans, revealing the term loan will have a maturity date 40 months from drawdown at an annual interest rate of 12.5 per cent. The loan will be paid back in monthly instalments.
The line of credit will be available for drawdown at the company's discretion, also attracting an annual interest 12.5 per cent with a 36-month term.
Buddy will use the term loan to totally extinguish a vendor debt held by Luminous Wide and to reduce a vendor debt held by Eastfield Lighting. The total payments to the two entities of approximately US$12.5 million (roughly A$16.3 million) are part of an agreement reached in October last year, with the vendor debts being subject to a US$10 million reduction in total indebtedness as part of these arrangements.
A "remarkable milestone"
Buddy Technologies CEO David McLauchlan says, "this is a remarkable milestone in the history of our business."
“With this package of finance facilities, a new manufacturing agreement, the release of all our trade and inventory finance facilities, and the forgiveness of more than 40 per cent of our outstanding vendor debt, Buddy is today very much positioned for strength."
"We will now increase our production rates while cutting costs, grow supply and inventory, and once the new orders that we’ve now immediately placed with our manufacturer begin to be delivered, be in a position to meet the extraordinary and growing demand for smart lighting worldwide," he concluded.
Buddy believers have been on a wild ride over the last twelve months. The company share price hit a low of 0.6 cents in March 2020 before soaring to 10 cents in late August. The chart reflecting a rise of over 1500 per cent from point to point.
BUD shares are down 3.85 per cent today at 5 cents at 11.58 am AEDT.