Charlie’s Group Obtains Release of $5.3m Guarantee

Charlie’s Group Obtains Release of $5.3m
Guarantee And Will Repay Debt Early

Australasian premium beverage company Charlie’s Group Ltd today announced that it has negotiated the release of the $5.3m guarantee, effective immediately, given to the bank by the company’s largest shareholder, Collins Asset Management (through Cottisloe Holdings), to support debt facilities.

At the end of the financial year, 30 June 2009, Charlie’s had debt outstanding to ANZ National Bank of $7.1m. Since then that debt has been reduced through the sale of its Henderson property and further debt reduction through strong profitability to $4.3m today.

Although not required as part of this arrangement, the company intends to pay the $0.5m principal repayment early, at the end of this month rather than the due date of 31 March 2010 to further reduce debt and benefit from interest cost savings. This repayment will be made from operating cash flows and will bring total debt down to $3.8m by 28 February 2010.

Chairman Ted van Arkel said directors were pleased that changes to the business have meant that the company is now generating positive operating cash flows and strong profitability.

“The confidence the ANZ National Bank has shown by releasing the Collins guarantee is particularly pleasing. I would like to again thank Collins for their ongoing support and for providing the guarantee originally, which is now no longer required by the bank.” he said.

Mr van Arkel said that following the release of the Collins guarantee the company would now be required to be measured against standard financial covenants by ANZ National Bank.

“Last year, Charlie’s signalled that it might undertake an equity raising but directors now view this as no longer necessary given the profitable trading of Charlie’s and the substantially improved balance sheet.

“Should an attractive opportunity or specific project be presented that the company felt fitted with its strategy then it might look to raise capital at that time,” Mr van Arkel said.

Charlie’s will report its half year results to 31 December 2009 next Tuesday, 23 February, which are expected to be in line with the guidance previously given.

ENDS

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