Vinyl Group Accelerates E-commerce Sales with $1.5m Facility from Major Shareholder Songtradr

Australian music technology and media company Vinyl Group (ASX: VNL) is set to accelerate its e-commerce sales after it secured a $1.5 million revolving line of credit with US business-to-business music platform and Vinyl’s major shareholder, Songtradr Inc.

The 24-month facility will provide flexible working capital to support the establishment of rapidly scaling direct-to-consumer vinyl marketplace Vinyl.com.

Vinyl expects the facility to give the company additional balance sheet flexibility as it scales its e-commerce operations.

Liabilities Conversion

Vinyl has also reached an in-principle agreement with Songtradr to convert certain historical liabilities into equity, including the US$1m acquisition plus 5% net revenue of the Vinyl.com domain and trademark licence.

The company will satisfy the amounts through the issue of Vinyl fully-paid ordinary shares at the prevailing market price.

The deal should further strengthen Vinyl’s capital structure as it heads into the new financial year.

Songtradr Partnership

Vinyl chief executive officer Josh Simons welcomed the agreements with Songtradr.

“This partnership continues to create real opportunities for our business,” he said.

“The new credit line gives us flexibility to accelerate growth in Vinyl.com and support long-term shareholder value and Songtradr’s continued support reflects a shared belief in creating a more transparent and connected music ecosystem.”

Concrete Playground Buy-out

Vinyl Group owns and operates the world’s biggest database of official music credits sourced directly from record labels, distributors, publishers and industry associations.

In January, the company completed a $7.2m accelerated non-renounceable entitlement offer to shore up its balance sheet and provide critical funding for planned transactions, including the $5.5m buy-out of digital city guide Concrete Playground.

Vinyl forecasts the deal will contribute over $1.5m in EBITDA following its integration into newly-launched publishing house Vinyl Media.

‘Huge Milestone’

Mr Simons referenced the Concrete Playground acquisition as a “huge milestone” for the group.

“Concrete Playground has built an engaged and trusted platform that seamlessly fits into our broader media strategy as part of Vinyl Media,” he said.

“This acquisition strengthens our media division and unlocks new opportunities for our advertising partners, while accelerating our timeline to sustained profitability.”