Mighty Kingdom Limited (ASX: MKL) Announces Debt Facility Details
Mighty Kingdom Limited (“MKL”) has provided supplementary details regarding its recently established debt facility, which was initially announced on 24 December 2024. The facility has a face value of up to $1,200,000 and is set to mature on 18 April 2025 or upon receipt of certain rebates, whichever comes first.
Debt Facility Terms
The debt facility includes an interest rate of 20% on the face value, which will be capitalised and added to the principal upon drawdown. For repayment, the lender may opt for shares to be issued at $0.02, contingent on shareholder approval at an upcoming extraordinary general meeting.
The agreement also imposes several negative covenants, restricting the company from creating encumbrances, disposing of material assets, paying dividends, reducing capital, or incurring further debts exceeding $50,000 without prior consent from the lender.
Alternate Repayment Mechanism
Should MKL fail to repay the outstanding debt by the due date and remain in default for three months, the lender has the discretion to convert the outstanding amount into equity. This would involve issuing shares at a default conversion price of $0.01 per share, also subject to shareholder approval.
Mighty Kingdom Limited confirmed there are no substantial assets being acquired related to this debt facility under relevant listing rules.
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