Vinyl Group (ASX: VNL) has taken further steps to deepen its strategic relationship with music tech partner Songtradr, securing a $1.5 million revolving credit line and proposing to convert legacy debts into equity.
Announced to the ASX on 30 June, the new 24-month facility is designed to provide working capital flexibility as Vinyl.com, Vinyl Group’s direct-to-consumer vinyl marketplace, heads into the peak holiday trading period. The line of credit, structured on commercial terms, allows for drawdowns starting at A$100,000 and bears interest at the Reserve Bank rate plus 5% per annum. Interest is payable monthly, with the option to capitalise, and principal is due in full on maturity.
Vinyl Group CEO Josh Simons said: “The new credit line gives us flexibility to accelerate growth in Vinyl.com and support long-term shareholder value.”
Songtradr, which remains a major shareholder, has also agreed in principle to convert two existing liabilities into equity, pending shareholder approval at Vinyl Group’s upcoming FY25 AGM, expected October or November. The conversion covers:
• A buyout option related to Vinyl Group’s existing licence for the Vinyl.com domain name and trademark, valued at US$1 million plus 5% of net revenue from the agreement term; and
• The remaining A$343,622 balance from a neighbouring rights advance originally issued in 2020.
Under the proposed arrangement, these amounts would be satisfied through the issuance of fully paid ordinary shares in Vinyl Group, issued at prevailing market price.
“Our continued support for Vinyl Group reflects our shared belief in creating a more transparent and connected music ecosystem,” said Paul Wiltshire, CEO of Songtradr.
The move is expected to improve Vinyl Group’s capital structure and strengthen its balance sheet heading into FY26. Formal documentation will be presented to shareholders with the AGM notice later this year.
Vinyl Group operates a multi-faceted music ecosystem including e-commerce (Vinyl.com), social platform Vampr, music credits database Jaxsta, Web3 collectibles arm Serenade, and publishing brands such as Concrete Playground, Tone Deaf and Mediaweek. It also licenses Rolling Stone, Variety and Refinery29 in Australia.
From this year, Vinyl Group has been sharing monthly trading updates by way of social posts, capturing trends and growth across the business’s various subsidiaries.
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