PopReach Signs Binding Agreement for US$7.5 Million Debt Refinancing Facility
September 21, 2020
PopReach Corporation, a free-to-play mobile game publisher focused on acquiring and optimizing proven game franchises, today announced that its wholly-owned subsidiary, PopReach Incorporated, has signed a binding agreement for a US$7.5 million senior secured credit facility with a leading Canadian Schedule I Bank. The New Facility, secured through the Lender's Technology and Innovation Banking group, is intended to refinance PopReach's previous credit facility, of which US$6.6 million is currently outstanding, and also provides PopReach with a US$1.0 million revolving term credit facility.
The New Facility, once closed, will have a 24 month term, with the US$6.5 million term portion bearing interest at the Lender's U.S. Base Lending Rate plus 3.50% per annum, and the US$1.0 million revolving portion (which is available in US dollars or Canadian dollars) bearing interest at the Lender's U.S. Base Lending Rate or Prime Lending Rate, as applicable, plus 2.00% per annum.
The US$6.5 million term portion will feature an initial three month interest only payment period, followed by up to 21 equal monthly instalments of principal (each payment calculated as 1/57th of the advance) plus interest, as applicable, with the final payment of the remaining principal and interest then outstanding due 24 months from the initial drawdown date. The New Facility will be guaranteed by PopReach and secured by a first ranking security interest in favour of the Lender over all of the assets and properties of PopReach and of the borrower, PopReach Incorporated. The New Facility is subject to such guarantee and security documents being entered into, as well as customary financial and other covenants for a transaction of this type.
In addition to providing PopReach with a new US$1.0 million revolving facility for general corporate purposes, the New Facility is intended to allow PopReach to completely refinance its previous credit facility, at a significant improvement from the interest rate of LIBOR plus 7.00% annum, with a LIBOR floor of 2.00%.
Prepayments of the New Facility are permitted without penalty at any time, in whole or in part.
"This debt refinancing, once closed, will provide significant interest expense savings, improve cash flow, and increase our financial flexibility with additional credit to help support the execution of our growth strategy," said Christopher Locke, President, COO, and Co-Founder of PopReach. "The considerable improvement in terms, and the opportunity to secure lending from a leading Schedule I Bank, is a testament to the progression and strong financial profile of our organization and we are grateful for the Lender's support."
About PopReach Corporation
PopReach, a Tier 1 Technology Issuer on the TSX Venture Exchange, is a free-to-play mobile game publisher focused on acquiring and optimizing proven game franchises. The company has acquired 12 successful game franchises competing mainly in the North American game market, including Smurfs' Village (IP under license), Kitchen Scramble, Gardens of Time, City Girl Life, War of Nations and Kingdoms of Camelot. The company's franchises are enjoyed by over 1.2 million unique players a month. PopReach, headquartered in Toronto, employs a team of over 120 experts in Toronto, and Bangalore.
SOURCE: PopReach Corporation