Real Good Food Company Stock Surges After Debt Refinancing Announcement

Real Good Food Company Stock Surges After Debt Refinancing Announcement

Real Good Food Company, Inc. (NASDAQ: RGF) shares experienced a significant rise during extended trading hours on Thursday. This surge followed the company's announcement of a strategic debt refinancing agreement involving PMC Financial Services and Emblem Investment Fund, which resulted in a $60 million new term loan.

Key Details of the Refinancing Agreement

The company plans to allocate $8 million of the proceeds to settle existing PMC financing. The remaining $52 million will be used for transaction fees and to fund general corporate purposes. This financial maneuver aims to enhance the company's manufacturing capabilities and support several corporate initiatives, thereby positioning Real Good Food for sustainable long-term growth.

As part of this agreement, Real Good Food Company issued 19.99% of its outstanding equity to Emblem in the form of Class C Units of its subsidiary, Real Good Food LLC. These units are exchangeable into the company’s common shares.

CEO's Statement on the Transaction

Tim Zimmer, CEO of Real Good Foods, expressed excitement about the refinancing, stating, "We are thrilled to announce these transformational transactions, which provide us with significant liquidity and therefore the capability to make critical investments in our supply chain and strategic initiatives. This will better position our supply chain to meet strong demand for our products and improve service for our customers, which sets the foundation for profitable long-term growth."

Market Reaction

Following the announcement, Real Good Food Company shares saw heavy trading volume, with over 7.6 million shares traded during Thursday's session. According to Benzinga Pro, the stock price increased by 66.76% in after-hours trading, reaching 62 cents at the time of publication.

Additional Insights

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