Three Tavistock bosses loan firm £630,000 to 'bolster' capital position

A trading update released on Friday (27 September) revealed directors Oliver Cooke and Brian Raven as well as chief investment officer Christopher Peel gave an "irrevocable undertaking" to the company.

All three senior employees will loan up to £210,000 to the company with the agreement the sums will be repaid with interest on 30 September 2020.

In the update, the Tavistock board said the directors felt seeking to raise additional capital elsewhere would be "unduly dilutive for shareholders."

It said: "To bolster the regulatory capital position in a manner that is not dilutive to shareholders, [Tavistock] have entered into an unsecured convertible loan facility with two of the company's directors and its chief investment officer."

Other terms of the loan included: A facility fee of 5% of the funds, interest payable on funds drawn down of 10% and the option for the company, only at its "absolute discretion," to elect to convert some funds drawn down.

'Challenging market conditions'

Tavistock said it is trading in line with market expectations despite challenging market conditions such as Brexit uncertainty, political uncertainty and international trade disputes. 

The firm said it is impossible to determine how much more challenging conditions may become over the short term and any potential impact on the company's future trading before "normal conditions return."

The board said the best way to boost profitability in the long-term is by the selective purchasing of client books from retiring advisers, investment in initiatives and a reduction of net debt through scheduled capital repayments under its existing NatWest loan facility 

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