UK’s Real Good Food raises funds for business expansion
UK-based Real Good Food has raised £15.5m of expansion capital from a new investor and two existing shareholders through both debt finance and new equity.
The capital will be used for the expansion of its subsidiaries Renshaw and Haydens.
This new capital injection will be raised with the issue of a secured loan note instrument of up to £8.75m from funds managed and controlled by Downing, which is fully redeemable after completion of three years.
Downing has also committed to subscribe for shares in Real Good Food of 10% of the issued share capital at a price of 35p a share, raising a further £2.75m of expansion capital.
The company has also raised two £2m loan facilities from existing shareholders of Napier Brown Holdings and Omnicane to maintain an appropriate level of working capital.
Real Good Food executive chairman Pieter Totté said: “We have already embarked upon this within our cake decorating division and are seeing positive results in order intake at Renshaw and Rainbow Dust.
"The board has taken the decision to raise the expansion capital on order to enable us to accelerate our investment programme into other divisions."
The company will be investing nearly £7m for the expansion of its Renshaw facility as well as installation of new soft icings and discs production lines.
In addition, Real Good Food will invest £8m in its Haydens site to reconfigure operations, which includes blast-freezing capabilities and the installation of a new automated Yum Yum line.
The majority of the expansion plan is expected to be completed by the end of September, and the additional capacity is to begin delivering significant financial returns from 1 April next year.