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UK recruiter Kellan today announced that it has entered into a working capital facility amounting to £600,000 from Paul Bell, who holds 88,991,840 ordinary shares. This represents 41.7% of the issued share capital of the company.
Companies often apply for a working capital facility to solve short-term cash flow problems.
“The facility is unsecured and any drawdown will accrue interest at a rate of 4% per annum which will be paid together with the principal outstanding on 21 March 2014, unless the Company opts to repay such amounts at an earlier date. The funds will be used by the Company as interim working capital pending a refinancing of the Company,” the firm said in a message to shareholders.
“Due to the fact that, under the AIM Rules, Paul Bell is a substantial shareholder of the Company, the entering into the facility constitutes a related party transaction as defined by the AIM Rules. The Directors, other than Quentin Spratt, having consulted with Sanlam Securities UK Limited, the Company's nominated adviser, consider that the terms of the loans are fair and reasonable insofar as Shareholders are concerned.”