Eco Animal Health signs new £10m facility with NatWest

11th Jul 2022 14:32

(Sharecast News) - Animal pharmaceuticals developer Eco Animal Health Group has signed a new bank facility agreement with its existing bank NatWest, it announced on Monday.

The AIM-traded firm said the new revolving credit facility would provide for drawings of up to £10m in flexible amounts and repayment periods, with a term expiring on 30 June 2026.

It said the interest rate would be 1.95% over the Sterling Overnight Index Average lending rate.

Covenants, comprising customary leverage and interest cover tests, would be reported six-monthly to NatWest, coincident with Eco's AIM financial reporting obligations.

The facility is in addition to the company's pre-existing £5m overdraft facility, with pre-existing security arrangements supporting the new facility.

Eco's board said the revolving credit facility would provide "structured working capital support".

While it was not intended that the facility would directly fund any elements of its research and development programme, its existence would ensure that the group would have the confidence to progress its new product development programme and deal with working capital movements.

"I am very pleased to have signed this facility with NatWest; it will provide the flexibility to fund working capital movements in these uncertain times and allow us to use our core cash generated from operations to fund our exciting research and development projects," said chief financial officer Christopher Wilks.

At 1248 BST, shares in Eco Animal Health Group were flat at 112p.

Reporting by Josh White at Sharecast.com.