- 5G Networks (5GN) expects to receive a $16.6 million payment from acquired business Webcentral Group (WCG) to pay off part of a $41 million loan
- WCG advised its owner 5GN that it has received credit approval from Commonwealth Bank (CBA) for a $16.6 million debt facility
- It’s expected all of those funds will go to the telco, bringing Webcentral’s outstanding loan amount to 5GN to $26 million
- The telco says it’ll use the loan repayment from WCG to fund further acquisition opportunities
- Shares in 5GN are trading up 0.54 per cent at 93.5 cents, while shares in WCG are trading down 1 per cent at 49.5 cents
5G Networks (5GN) expects to receive a $16.6 million payment from acquired business Webcentral Group (WCG) to pay off part of a $41 million loan.
WCG advised its new owner 5GN that it has received credit approval from Commonwealth Bank (CBA) for a $16.6 million debt facility.
The facility consists of a $15 million Market Rate Loan Facility, $1.5 million Bank Guarantee Facility and a $100,000 Credit Card Facility.
The interest rate for the market loan is 4.25 per cent, which WCG notes is 0.7 per cent smaller than the margin charged on the 5GN loan.
Once the $16.6 million is handed over to 5GN, Wencentral will still owe $26 million as part of the loan.
“The CBA Debt Facility recognises the significant improvement to Webcentral’s financial position since 5G Networks took control of Webcentral in October 2020,
including the return to profitability, strong operating cashflow performance and the strength of the Webcentral business,” Managing Director Joe Demase said.
“The Debt Facility will allow Webcentral to repay a significant portion of the 5G Networks loan and will reduce Webcentral’s borrowing costs.”
Meanwhile, 5GN said it plans to use the WCG loan repayment funds to fund future acquisition opportunities.
At the close of market on Monday, shares in 5GN were trading up 0.54 per cent at 93.5 cents, while shares in WCG were trading down 1 per cent at 49.5 cents.