NedSense enterprises n.v (“NedSense”) today announces that it has reached agreement with an affiliate of Ronglian Investments Limited (“Ronglian”) in respect of a EUR 1,000,000 loan to NedSense. NedSense will use the loan amount received to cover working capital needs in the coming period.
As announced on 4 January 2015, NedSense has reached agreement with Ronglian Investments Limited
(“Ronglian“) on the sale of NedSense’s LOFT division for a purchase price of EUR 8.0 million (the “Purchase Price“), whereby EUR 1.6 million of the Purchase Price (the (“Escrow Amount“) will be put in escrow with a third party escrow agent as additional recourse for Ronglian for a period of 12 months after closing of the transaction (the “Transaction“).
To cover working capital requirements in the coming period, an affiliate of Ronglian has lent NedSense EUR 1,000,000 (the “Interim Loan“). The Interim Loan bears an interest of 4% per annum and is repayable by NedSense between 29 February 2016 (the envisaged closing date of the Transaction) and 13 July 2016. NedSense intends to use the proceeds of the Transaction to repay the Interim Loan.
The sale and purchase agreement entered into between NedSense and Ronglian in the context of the Transaction contains a working capital purchase price adjustment mechanism. Pursuant to this mechanism the Purchase Price will be adjusted if the actual working capital of LOFT on the closing date of the Transaction is higher or lower than EUR 500,000 negative. If the actual working capital is less than EUR 500,000 negative, the Purchase Price will be lowered by such excess on a euro-for-euro basis, whereby the Escrow Amount serves as sole recourse for such adjustment. If the actual working capital is higher than EUR 500,000 negative, the Purchase Price will be increased by such excess on a euro-for-euro basis.
Current expectation of NedSense management is that the LOFT working capital on the closing date of the Transaction will be approximately EUR 0. If this will indeed be the actual working capital of LOFT on the closing date of the Transaction, the Purchase Price will consequently be increased with EUR 500,000.
The cost related to the Transaction and anticipated total expenses for NedSense in 2016 are currently estimated by NedSense management to be approximately EUR 1,500,000. The current cash balance of NedSense (after receipt of the Interim Loan) is approximately EUR 1,000,000.