Article – Businesswire

March 17 (BusinessWire) – 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, stellar stock performer, finalises line of credit to back possible sales push

By Peter Kerr

March 17 (BusinessWire) – 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)

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