Fast-growing real estate group The Agency (ASX: AU1) has been given a reprieve on a $12 million debt repayment that was originally due on 31 March, with Macquarie Bank extending out the deadline until 30 September.
It has also been revealed today that substantial shareholder and non-executive director Mitchell Atkins has resigned from the company, which he joined in mid-2019, effective 8 May.
The latest filings from December showed Atkins has a 17.6 per cent holding in the company, equivalent to around $2.1 million at the last trading price. These are held directly and indirectly through his Sydney-based boutique investment group Magnolia Capital.
When announcing its third straight half-yearly loss in early March, the group made a going concern clarification that it had received offers to refinance the facility but at the time that was still incomplete.
The day before the debt was due, The Agency announced Macquarie had agreed to extend the debt repayment date for two weeks; the kind of postponement that was to be repeated several times and led to a suspension from trading that was eventually lifted today.
The Agency highlights the new agreement with an 8.5 per cent interest rate margin payable recognises its significant asset position and unique business model and provides the necessary support and financial flexibility to reflect the potential impact of COVID-19.
The agreement follows "positive and collaborative negotiations" with the majority of conditions remaining consistent with the existing loan and security documents, but The Agency will need to provide weekly reporting to Macquarie.
"The Funder has agreed to a more favourable LVR financial undertaking to reflect the potential impact of COVID-19 on the company's financial position," the real estate agency said.
"In addition, the Funder has also allowed for the provision for the company to obtain a new $1 million secured debt facility by 15 May 2020 to provide a working capital buffer while the impact of COVID-19 remains somewhat unclear.
"With the support of the funder, The Agency proactively engaged BDO (Australia) Ltd1 to assist in reviewing the company's financial model. This work will help ensure the Company is best prepared for the post COVID-19 rebound and its continued growth plans."
To assist in corporate advisory, and to identify and evaluate available opportunities in relation to refinancing the current primary bank debt facilities, The Agency has mandated Canaccord Genuity (Australia) Limited.
The board thanked Atkins for his contribution and wishes him every success for the future. He came on board with the company when Magnolia Capital became a substantial shareholder through a capital raising in July 2019.
"The Agency network around Australia have built a strong, robust real estate business," he said at the time.
"We are excited to be joining The Agency team from a board perspective, capital and an operational perspective on their growth journey, and see a deep range of synergies between our existing operating business units and their core business as a whole.
"We're excited to be able to offer support across their finance, rental and sales businesses."
Business News Australia
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