CONCLUSION OF A NEW LOAN AGREEMENT WITH ALPHA BLUE OCEAN
Houdeng-Goegnies (Belgium), January 27, 2023, 6 p.m. – Pharmasimple (ISIN code: BE0974302342. Ticker: ALPHS, the “
Company
“), announces the conclusion of a loan agreement with the alternative investment fund Alpha Blue Ocean (”
ABO
”) through its investment fund Global Tech Opportunities 12 for a principal amount of 5,644,080 euros.
The conclusion of this new financing agreement is a crucial step in ensuring the sustainability and redevelopment of the Company.
As a reminder, the Company, a pioneer in the online distribution of parapharmacy products, directed all of its activity towards online sales until the end of 2021. In order to enable it to continue its development, the Company entered into a first financing agreement with ABO in the summer of 2021 for an amount of 10 million euros in the form of convertible bonds with the right to subscribe for shares. The main objectives of this financing were to strengthen its financial structure in order to absorb variations in its working capital requirement and to support the Company’s growth strategy. This financing enabled the Company to proceed with the settlement of its supplier accounts and to continue its activity under favorable conditions with a stable level of sales activity on its Internet platforms. The Company then began an exercise of in-depth strategic thinking to change its development model, which was then based solely on online sales towards a mixed online/offline. This change in the Company’s business plan is based on the acquisitions and integration of pharmacies into the group’s ecosystem. The stated objective of the Company was to buy in the next 5 years between 150 and 200 pharmacies, mainly in Belgium.
In order to finance this ambitious objective, the Company obtained from ABO a second financing through bonds convertible into shares issued by the Company for a total nominal value of 200,000,000 euros (the ”
OCA financing
“).
On September 29, 2022, the Company announced the suspension for a period of at least 6 months of drawdowns under the OCA Financing contract concluded with ABO. This decision was made in view of the significant number of shares issued by the Company and its market capitalization.
The Company then entered into discussions with financial partners, including ABO, in order to find sources of additional non-dilutive financing.
With a view to ensuring a stable source of financing during the period of suspension of the drawdown of convertible bonds and to meet the Company’s financing needs during this period, it had been agreed with ABO to temporarily set up a new loan agreement (the “
Temporary Loan
“).
Despite this financial support, the Company has not been able to honor the monthly installments of certain vendor loans for December 2022. In this context and in order to preserve the Company’s cash, the latter has taken the decision, as announced in its press release of January 3, 2023, to terminate by mutual agreement with the sellers the contracts for the acquisition of four pharmacies and not to confirm the acquisition of another pharmacy. The company has agreed with the sellers that the acquisition and integration of these four pharmacies can be renegotiated during 2023.
The Company announces today that it has obtained from ABO a new financing of 2,000,000 euros and the refinancing of the existing Temporary Loan in the amount of 3,644,080 euros (interest included).
This new financing will enable the Company to obtain cash in tranches of 500,000 euros per month (250,000 euros available on the working day following the 14th of each month and 250,000 euros available on the last working day of each month) spread over a period of 4 month.
This new loan operates on the principle of a line of credit for which it is up to the Company to take the initiative to activate each tranche of the new loan contract.
As part of this new financing, the Company has also agreed with ABO to suspend the drawing of convertible bonds for a period of four months.
However, ABO retains the option to require the issuance of new tranches of convertible bonds during and after this suspension period, in order to repay the amounts owed by the Company under the new loan agreement. Subject to certain conditions, at least 500,000 euros due under the new loan will be repaid on a quarterly basis by issuing new convertible bonds under the OCA Financing.
At the end of the 4-month suspension period, the drawdown of convertible bonds may resume in accordance with the terms of the OCA Financing contract.
Each tranche will be applied for defined purposes such as the repayment of the Company’s financial indebtedness, the repayment of vendor loans, the payment of the Company’s restructuring costs and the payment of its suppliers.
The new loan agreement will be fully repaid no later than December 31, 2025 and the Company retains the option to prepay any tranche at any time before the final maturity date.
The conclusion of this new financing is accompanied by the creation of sureties in favor of ABO on the Company’s assets.
The Company drew the first tranche immediately upon signature.
This source of financing will enable the Company to finalize its restructuring, to pursue the reversal of its business plan and to meet its short and medium term obligations.
Contact
Company
PHARMASIMPLE
Michael Willems
Financial communication
CapValue
About Pharmasimple
:
About Pharmasimple: Pharmasimple is a distribution group specializing in the sale of pharmaceutical and parapharmaceutical products. With a network of around ten pharmacies in Belgium, the company aims to become one of the leaders in its sector in this country through an ambitious program of external growth. In 2021, Pharmasimple achieved sales of €30.0 million. Pharmasimple shares are listed on the Euronext Growth market. ISIN code: BE0974302342. Mnemonic: ALPHS.
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Full and original press release in PDF format:
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