- Hemp company Ecofibre (EOF) has obtained a A$10 million term loan, due for repayment in July 2021
- The loan has come from a trust, related to the company’s Non-Executive Chairman, Barry Lambert
- Ecofibre’s new loan has two extension options, partial repayment options, and an eight per cent interest rate per year
- The company will use the facility to fortify its balance sheet during the market volatility caused by COVID-19
- Ecofibre shares are down 0.85 per cent today, trading for $2.33 per share
Hemp company Ecofibre (EOF) has obtained a A$10 million term loan, due for repayment in July 2021.
The loan has come from a trust, which the company did not name in its announcement. However, Ecofibre revealed that the trust is related to the company’s Non-Executive Chairman, Barry Lambert.
While Barry is the appointer of the trust, he and his descendants are not beneficiaries. He is also not a director or shareholder of the trustee company.
While the key terms of the loan set the repayment date as July 15, 2021, Ecofibre will have two opportunities to extend the date. At the company’s option, and on the giving of three months’ notice, the repayment date may be extended twice, for six months each time.
On each date that Ecofibre extends the repayment, the company may choose to partially repay the loan in multiples of $1 million. The loan comes with no payable lender costs, no financial covenants, and no security or collateral.
The trust has set the term loan’s interest rate at eight per cent per year.
Ecofibre’s Chief Executive Officer, Eric Wang, commented on how the company will put the loan to use. In particular, he indicated that the loan will help to fortify the business during the economic upheaval caused by COVID-19.
“The company is strengthening its balance sheet to ensure flexibility to continue its growth strategy through a potential extended period of market volatility.
“Ecofibre has no existing debt, and the new facility is in line with Ecofibre’s focus on diluted EPS as our primary measure of financial performance,” he said.
Ecofibre shares are down 0.85 per cent today, trading for $2.33 per share at 10:58 am AEST.