Indoor Skydive makes fresh start, lands debt restructure, strong revenues… and another 92pc pop
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Leisure outfit, Indoor Skydive (ASX:IDZ), has completed the final phase of its “repair” strategy, entering into debt restructure agreements with its lenders.
An agreement was reached with Westpac (ASX:WBC), in which the bank agreed to forgive $7.5 milion of existing debt plus outstanding interest for a payment of $2.6 million.
A deal was also struck with Birkdale, in which the remaining debt balance of $2.27 million has been rolled into new loan terms of 5.5 years.
The company also forged a new debt facility with Causeway Financial for a three-year, $4 million loan. This facility will be used to pay Westpac the $2.6 million it owes.
It also wrote down $942k on legal services associated with the legal dispute going back to 2018.
Over the past 12 months, the company’s parent group, the ISA Group, has been executing a strategy of repair after the costly legal dispute in 2018. The debt restructure announced today has resulted in an improvement of $7.7 million to the Net Tangible Assets of the company.
Indoor Skydive’s was embroiled in a legal dispute with US company SkyVenture, over the use of SkyVenture’s intellectually-protected wind tunnel technology.
The dispute was eventually settled in the courts in 2018, with Indoor Skydive agreeing to pay SkyVenture around $4 million, and ceasing any franchising activities that use SkyVenture’s wind tunnel technology to third parties.
Indoor Skydive agreed that it would instead revert back to its original role as an owner-operator of the iFLY-branded wind tunnels.
Along with the debt restructuring, the company has also today reported its first half results, where revenues increased by 16 per cent to $3.97 million.
The earnings mainly came from its wind tunnel and FREAK entertainment segments, which make up $3.3 million of the total revenue.
The company said COVID-19 has heavily affected its August to December earnings, with border closures and the lack of international tourists causing revenues to slump.
The company said it will continue to assess the viability of a franchise model to expand the brand. Multiple new sites are also currently under investigation, with its FREAK Entertainment rollout also in progress.
The company is also developing an immersive training and simulation business on the application of virtual reality.
Speaking of VR, you might want to take a look at some of the VR stocks trading on the ASX, which could be set for a breakout year.