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Flowgroup shares sink on short-term funding announcement
Gas and electricity supplier Flowgroup took on £5m of short-term funding from its loan-note holders, Palm Ventures and Lombard Odier Asset Management on Wednesday, and said that it was considering more long-term financing options as the energy sector continued to become more competitive.
AIM-quoted Flowgroup, which also reassured investors that it was trading in line with expectations, said the "highly competitive" market had forced it to re-evaluate its strategic position, despite having met several of its cost-cutting targets.
"The highly competitive market in which the company operates is continuing to evolve rapidly and new entrants with new business models continue to join the domestic energy supply market, while some businesses have exited," it said.
The first £2m tranche of the facility would be drawn down immediately, attracting a coupon of 1% per calendar month on funds drawn, accrued daily, with an aggregate arrangement fee of £75,000 payable in cash to the loan note holders on the maturity of the 2018 notes.
As of 1700 GMT, shares had plummeted 39.68% to 0.190p.