Collagen Solutions PLC (LON:COS) has announced that Collagen Solutions (US) Inc. and Collagen Solutions (NZ) Limited, its wholly-owned operating subsidiaries in the USA and New Zealand, respectively, have received a mix of loan and grant funding based on those governments' coronavirus (COVID-19) economic support programmes.
The AIM-listed developer and manufacturer of biomaterials and regenerative medicines for the enhancement and extension of human life noted that Collagen Solutions USA received US$240,000 in US government-backed loan funding through one of the company's banking providers.
It said this loan has a two-year term with an interest rate of 1.0% per year, with payments of principal and interest deferred for the first six months. The loan may be forgiven in whole or in part if used for eligible purposes including payroll and rent in the USA in the first eight weeks of the term.
The company said it believes that a substantial part of this funding will be forgiven, effectively acting as a form of grant. To the extent all or some portion of the principal amount is not forgiven, Collagen Solutions USA is obligated to make equal monthly payments of the remaining principal and interest.
It added that Collagen Solutions NZ also received NZ$35,000 from the New Zealand Ministry for Social Development's Wage Subsidy Scheme, which does not need to be repaid provided the scheme criteria are met.
The company said it believes these criteria will be met, and therefore this subsidy is also a form of grant.
Earlier this week, Collagen Solutions revealed that several options remain open to it as a formal sales process continues, including the sale of the company.
In a regulatory statement on Monday, the group told investors that it received indications of interest for a potential purchase of the whole company, a potential purchase of part of the business, and a refinancing of the company.