Vinyl Group Secures $1.5M Credit Line and Proposes Equity Swap with Songtradr

Strategic Financial Moves to Support Growth

Vinyl Group Ltd (ASX – VNL), Australia's sole ASX-listed music company, has taken significant steps to bolster its financial position and fuel expansion. The company announced a $1.5 million revolving line of credit with Songtradr Inc., its strategic partner and major shareholder. This facility, structured over 24 months with flexible drawdowns and an interest rate pegged at the Reserve Bank of Australia rate plus 5%, is designed to provide working capital to accelerate sales on Vinyl.com, the company’s fast-growing direct-to-consumer vinyl marketplace.

The credit line’s interest-only payments and the option to capitalize accrued interest offer Vinyl Group financial flexibility as it prepares for the critical 2025 holiday season, a peak period for e-commerce sales. This arrangement underscores the confidence Songtradr has in Vinyl Group’s growth trajectory and the potential of Vinyl.com as a key revenue driver.

Equity Conversion to Strengthen Balance Sheet

In addition to the credit facility, Vinyl Group and Songtradr have reached an agreement in principle to convert certain historical liabilities into equity. This proposed equity conversion involves issuing fully paid ordinary shares to settle obligations related to a buyout option for the Vinyl.com domain and a remaining balance on a Neighbouring Rights Advance from 2020.

This move aims to improve the company’s capital structure heading into the 2026 financial year by reducing debt and increasing shareholder equity. However, the transaction requires approval from Vinyl Group’s shareholders at the upcoming annual general meeting, accompanied by an independent expert’s report to ensure fairness and transparency.

Deepening Strategic Partnership

The financial arrangements further cement the partnership between Vinyl Group and Songtradr, reflecting a shared vision to create a more connected and transparent music ecosystem. Songtradr CEO Paul Wiltshire highlighted their ongoing commitment, while Vinyl Group CEO Josh Simons emphasized the credit line’s role in enabling accelerated growth and long-term shareholder value.

Vinyl Group’s diverse portfolio, including platforms like Vampr and Jaxsta, alongside Vinyl.com, positions it uniquely within the music and digital media landscape. These financial steps are critical as the company scales its e-commerce operations and navigates the evolving music industry.

Looking Ahead

Shareholders and market watchers will be closely monitoring the upcoming AGM for approval of the equity conversion and the finalisation of related documentation. The outcomes will provide clearer insight into Vinyl Group’s financial health and strategic direction as it leverages its partnership with Songtradr to capture growth opportunities.