Headquartered in Adelaide, Australia, Buddy Technologies Limited (ASX: BUD) is a leader in providing a platform for IoT and offers cloud-based solutions for making spaces smarter. The company has two subsidiaries – Buddy Platform and Lifi Labs, Inc. (LIFX). Buddy Platform entitles its customers to fully leverage digital technologies sustainably while LIFX provides smart lighting solutions.
On 1st April 2019, Buddy Technologies announced the acquisition of the leading smart lighting technology company, LIFX. Today, Buddy Technologies has released an update on LIFX Acquisition Financing Arrangements.
In the recent Acquisition Announcements, Buddy Technologies, Eastfield Lighting (Hong Kong) Co. Limited ("Eastfield") and Luminous Wide Limited ("Luminous") announced the execution of a formal agreement in which the trio decided to postpone a portion of cash payment due on 29 March 2019 in accordance to a varied loan agreement ("New LoC").
Buddy notified that US$2.03 million under the New LoC has been repaid following the provision of short-term bridge financing. According to Buddy, the following repayments under the New LoC are still pending:
- US$3.7 million of the New LoC that will be repaid on or before 30 June 2019
- The remaining US$3.7 million that will be repaid on or before 31 December 2019.
Buddy Technologies has entered into a term sheet with a prominent working capital financier, Scottish Pacific for the provision of A$20 million trade finance facility. Scottish Pacific is the biggest independent working capital lender of New Zealand and Australia. Under the facility, Buddy is expected to withdraw maximum funds from October to December, LIFX’s busiest period of the year.
Buddy has executed the term sheet for trade finance facility by completing full-fledged documentation to ensure that there is no disruption in LIFX manufacturing or supply.
The loan will be used to fund the manufacture of LIFX products, enabling Buddy to match considerably growing demand with unit supply.
Key terms of the trade finance facility
The trade receivable advance rate is calculated on the value of gross invoices submitted that excludes the invoices older than 90 days. The interest rate depends on the currency of the receivable incorporating prime rate plus 6.5%.
The March month turned out to be the best-ever performing March for LIFX with its revenues being more than 2x March 2018 revenues. This puts LIFX on track to achieve growth within the company’s past range of 70% to 100%.
On 10th April 2019, Buddy announced that its recent acquisition, LIFX will expand its presence across the US through the Best Buy stores. LIFX will introduce two of its most popular products - the A19 light and the LIFX Z-strip to the new audience.
The company’s stock closed at a market rate of AUD 0.079 on ASX (as on 23rd April 2019), that is a 5.3% rise in the stock price as compared to the previous day’s market rate. The market capitalisation of the company was reported at AUD 135.05 million.
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