Diligent finalises line of credit to back possible sales push

Diligent Board Member Services, the online provider of services to boards of directors whose shares have soared 370% in the past 12 months, has secured a new line of credit from Spring Street Partners LP for the next 18 months.

Diligent is listed on the NZX but incorporated in Delaware, and has a 12 person product development arm in Christchurch. Its software-based products include hosted online board papers for companies, with its website boasting over 7,300 worldwide users.

The company’s new New York-based chairman David Liptak took over from Rick Bettle earlier this month. Liptak is the founder and president of the investment firm Spring Street Partners, and the firm is the largest shareholder of Diligent through 20 million preferred A shares as well as 7.5 million of common stock.

Spring Street is making a US$1 million line of credit available to Diligent, with a commitment fee of 0.5% per annum for any amounts not drawn down on the credit line, and 9.5% per annum for any amounts drawn down.

“While Diligent has no current intention of drawing down funds from the credit line, this credit line will provide added flexibility for Diligent’s working capital and will also enable Diligent to pursue other options such as expansion of its sales efforts,” the company said in a statement to NZX.

Earlier this month Diligent reported a trend of increasing sales, with 41 licenses sold in the fourth quarter of 2009 for a gross profit of US$2.8 million. Its loss for the year was US$4.1 million, down from $17.1 million the year before. The shares rose 2.1% to 49 cents today.

McDouall Stuart analyst Roger Paterson in ShareChat earlier this month expected Diligent to reach a cashflow breakeven point in the third quarter of 2010, as which stage it will be attractive as a takeover option for a competitor. He rates the stock a ‘buy.’

Businesswire.co.nz

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Anti-spam verification:

Type the text you see in the image into the field below. You are asked to do this in order to verify that this enquiry is not being performed by an automated process.

Printable version

Related News

Diligent shares hit record high
Diligent 3Q sales keep climbing, flags quarterly breakeven
Diligent sales soar - Correction
Daily ShareChat: Diligent
Daily ShareChat: Diligent Board Member Services'
Daily ShareChat: Diligent Board Member Services'
Diligent reaches break-even in third quarter
Diligent posts 66% jump in second-quarter sales
Daily ShareChat: Diligent Board Member Services
Diligent, online board papers provider, moves closer to positive cash flow

Get quotes for Diligent Board Member Services INC Ordin (DIL)

NZX Annoucements for DIL