The Damstra (ASX:DTC) share price is soaring today. Here’s why

Software company Damstra has secured a new $20 million debt facility. Here are the details
The post The Damstra (ASX:DTC) share price is soaring today. Here’s why appeared first on The Motley Fool Australia. –

Shares in Damstra Holdings Ltd (ASX: DTC) are flying today after the company announced it has secured a new $20 million debt facility. At the time of writing, the Damstra share price is 88 cents – 6.02% higher than its previous closing price.

Damstra is a software company providing workplace management solutions and safety requirements.

Let’s take a closer look at today’s news from Damstra.

New debt facility

According to Damstra, the new debt facility will put it in a better position to fund its future growth.

Additionally, the new facility offers more flexible covenants and interest-only repayments. Damstra states this will improve its operating cashflow and provide extra capital to support its global growth ambitions.

Damstra’s new facility is with San Francisco-based Partners for Growth (PFG). PFG specialises in funding growing technology companies.

Previously, Damstra had a debt facility with Westpac. That facility was drawn down to $3.7 million.

That debt has now been transferred to Damstra’s facility with PFG, leaving it with access to around $17 million of additional capital.

Damstra’s PFG debt facility is for 36 months with fixed interest rates for the life of it. To pay its exisiting debt, Damstra will use an initial drawn down tranche at a fixed interest rate of 7.85%.

As part of its agreement with PFG, Damstra will issue the funding provider warrants. The warrants will be exercisable into up to roughly 1.6 million shares.

The warrants’ exercise prices will represent a premium of between 20% and 50% on the five-day weighted average price of Damstra shares prior to today’s announcement.

Commentary from management

Damstra’s CEO Christian Damstra said of the company’s new debt facility:

The outlook for Damstra has never been better as we continue to successfully execute our strategy. Partners for Growth and their strategic partner, the Silicon Valley Bank, have a strong track record of supporting high-growth technology companies, and we look forward to working with them as we look to capture the huge growth opportunity for our business around the world.

Damstra share price snapshot

This year has been a tough year for the Damstra share price. It has fallen 42% since the year began.

It has also dropped 33% since this time last year.

The company has a market capitalisation of around $155 million, with approximately 186 million shares outstanding.

The post The Damstra (ASX:DTC) share price is soaring today. Here’s why appeared first on The Motley Fool Australia.

Should you invest $1,000 in Damstra right now?

Before you consider Damstra, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Damstra wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

3 small cap ASX shares worth watching closely

3 small cap ASX shares for your watchlist

2 exciting small cap ASX shares analysts rate highly

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Damstra Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Damstra Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!