Struggling NZX-list cyber security company, Wynyard (NZX: WYN) has secured a short term $10 million revolving credit facility from major shareholder, the UK’s Skipton Building Society.
“This credit facility, should it be required, will help Wynyard manage the working capital needs of the business over the next 12 months,” the company said.
For the year to 31 December 2015 Wynyard reported an after tax loss of $44.1 million, EBITDA loss of $30.9 million. Total revenue was $26.3 million, against operating expense (not including deprecation and amortisation) of $57.1 million. The company ended the year with $14.9 million in cash.
Announcing the funding, Wynyard said it had actioned annualised cash savings of around $17 million through a combination of operating efficiencies and capital expenditure reductions, and undertaken initiatives to manage revenue timing risks should they occur.
The facility has a one-year term overall, with drawings available for a month at a time (subject to rollover), and will be secured over the assets of the company.It includes fees of eight percent and an interest rate of 15 percent per annum on any amount drawn down.
The funding comes with a number of strings attached. In order to access the funding the Wynyard board must be confident that the company can enter into transactions sufficient to repay any amount drawn down under the facility. Proceeds of transactions must be applied to repayment of any outstanding amounts under the facility.
The move follows a ‘please explain’ letter from the NZX the day earlier, noting a 20 percent decline in the company’s share price since 1 August, from $0.60 to $0.48, and a lengthy expose of the company’s problems from chairman, Guy Haddleton, at the company’s AGM in June.
He told the AGM that a capital raising initiated in late 2015 had slipped, along with expected contact closures. He also detailed a number of shortcomings in people, products and performance.
“Many of you are will be wondering why Craig [Richardson] remains CEO,” Haddleton said, adding: “From an independent review conducted for the board, it was clear that Craig was its leading salesperson, was and is regarded as inspirational by the employees and has worked tirelessly to resolve the challenges that we face. I have found Craig to have been receptive to guidance from me and others – and subsequently the board has agreed that he should continue as the Group CEO.”