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Ludgate Environmental Fund commits GBP1m to packaging firm

Ludgate Environmental Fund, the Aim-listed investment company focused on the cleantech sector, has committed a GBP1.0m working capital facility to Rapid Action Packaging.

Ludgate Environmental Fund, the Aim-listed investment company focused on the cleantech sector, has committed a GBP1.0m working capital facility to Rapid Action Packaging.

This amount is additional to the GBP4.0m invested by LEF into equity and cumulative unsecured loan stock of RAP in May 2008.

Established in 1997, RAP specialises in the design, manufacture and supply of ergonomic, cost effective and environmentally responsible packaging systems particularly for the "food on the move" market. The GBP1.0m facility will be used to fund equipment installation costs and planned increased stock levels in advance of a new product launch in the UK, Continental Europe and North America in the first quarter of 2010.

The facility, structured as a loan with warrants, can be drawn to a maximum of GBP1.0m up until 31 March 2010 and is fully repayable by May 2011. Interest on the loan is eight per cent per annum, payable semi-annually in arrears and, assuming the facility is fully drawn, LEF will receive five year warrants to subscribe for new shares equivalent to 4.2 per cent of the fully diluted share capital of RAP.

Nick Pople, director of Ludgate Investments and a director of RAP, says: "The planned launch by RAP of a new environmentally responsible packaging system into the food market place comes at a time when governments, retailers and consumers are all increasingly seeking ways to reduce the impact of packaging waste on the environment. This is particularly highlighted by the UK government’s recent announcement of a major overhaul of all packaging over the next decade with its new packaging strategy ‘Making the Most of Packaging; looking to tackle the whole supply chain from production to disposal. Continued innovation by RAP has led to the development of an exciting new environmentally responsible food packaging system which will be launched on the market in early 2010 and we are happy to continue supporting the growth of RAP through the provision of this working capital facility.’

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