TIDMBHR
RNS Number : 4298Y
Beacon Hill Resources plc
01 December 2014
1 December 2014
Beacon Hill Resources Plc / AIM: BHR / Sector: Mining
Beacon Hill Resources Plc
("Beacon Hill" or the "Company")
Financing and Restructuring Update
Proposed Variation and Conversion of approximately US$13 million
of Convertible Loan Notes, Up to GBP1.5 million Fundraising, Share
Capital Reorganisation and Notice of General Meeting
Beacon Hill, the coking coal developer focused on the Minas
Moatize Coking Coal Mine in Tete, Mozambique ('Minas Moatize'), is
pleased to announce an update on its financing arrangements and the
restructuring of its existing debt, aimed at significantly
strengthening and de-risking the Group's balance sheet, in order to
provide a more solid foundation for future growth as it targets the
recommencement of more economic and competitive coking coal
production in 2016.
Highlights:
-- Conditional subscription agreed to raise up to GBP1.5 million
(US$2.3 million) gross to provide sufficient working capital for
the Group until the end of Q1 2015
-- Commitments received to convert or postpone the maturity of
US$13.2 million in convertible loan notes thereby significantly
de-risking the Group's balance sheet
-- Capital reorganisation which includes, inter alia, a one for
1,000 share consolidation, to facilitate the proposals and future
funding activities
-- Proposed new senior debt facility of US$20 million at an advanced stage of negotiation
-- Intention to raise approximately a further US$14.5 million of
new equity in Q1 2015, alongside the restructuring of the existing
senior debt facility and introduction of the proposed new DFI
facility, to fund the Minas Moatize expansion project
-- Assuming successful completion of these initial proposals and
the remaining funding objectives, the Company is targeting
re-commencement of more economic and competitive coking coal
production in 2016, at a Tier 1 cash cost, following completion of
the planned Minas Moatize expansion project
Rowan Karstel, CEO of Beacon Hill, commented:
"Reaching agreement to convert the majority of the outstanding
convertible loan notes into equity is a significant step forward
for Beacon Hill as it seeks to establish a financially robust and
stable foundation for its future growth. The rationalisation of our
existing unsustainable debt structure, which has been achieved
through the welcome support of our key stakeholders, including our
existing senior debt provider and noteholder, Vitol Coal S.A., will
substantially strengthen the Company's balance sheet as we
endeavour to secure both the new US$20 million senior debt facility
from the DFI and additional equity funding required to proceed with
the development of Minas Moatize into a Tier 1 cash cost coking
coal project.
"We are cognisant of the fact that these proposals will result
in significant dilution for the Company's existing shareholders.
However, in light of the continuing depressed market conditions for
coking coal and ongoing suspension of our mining operations, we
believe that such measures are essential to ensure the Company's
survival as we seek to secure the further financing to enable us to
deliver on our washplant expansion project and resume more economic
and competitive production in 2016."
For further information, please contact:
Beacon Hill Resources Plc
Justin Farr-Jones, Chairman (jfarr-jones@bhrplc.com)
Rowan Karstel, Chief Executive Officer
(rowan.karstel@bhrplc.com)
Strand Hanson Limited (Nominated
& Financial Adviser and Broker)
James Harris / Matthew Chandler / +44 20 7409
Ritchie Balmer 3494
St Brides Media & Finance Limited
(Financial Public Relations) +44 20 7236
Susie Geliher / Elisabeth Cowell 1177
Capitalised terms used but not defined in this announcement have
the meanings set out in the Appendix to this announcement.
OVERVIEW OF THE PROPOSALS
In light of the suspension of the Company's mining operations
since late 2013, sustained adverse global coal market conditions
and protracted funding negotiations in respect of the planned Minas
Moatize washplant expansion project, the Company's existing debt
that funded the first 1.8 Mtpa ROM phase of the Minas Moatize
project is in urgent need of restructuring.
The Board is of the opinion that the proposed restructuring of
the Company's existing debt and raising of additional short term
working capital will facilitate the finalisation of the proposed
new senior debt facility from the DFI and associated significant
equity fundraising required to fund the second phase of the Minas
Moatize 3.2 Mtpa expansion project and enable the Company to
re-enter production in 2016 as a Tier 1, globally competitive cost
producer. Without the restructuring, there is a material risk that
the Company would fail to retain the support of its current senior
debt provider in Q1 2015 and fail to attract the necessary
additional capital it requires to complete its planned globally
competitive Tier 1 coking coal project.
As part of this proposed restructuring, the Board is pleased to
announce that it has reached agreement with the holders of
approximately US$12.0m of the Convertible Loan Notes issued
historically by the Company and its subsidiary, BHRM, including
Latitude Zero Financial Investment Fund ("Latitude") and Vitol Coal
S.A. ("Vitol"), that all of the principal and accrued interest due
to them under such Convertible Loan Notes will be Converted into
new ordinary shares in the Company at a price of 0.01 pence per
Existing Ordinary Share. The Conversion is therefore taking place
at an 88 per cent. discount to the Company's middle-market closing
share price of 0.08 pence on 28 November 2014, being the last
Business Day prior to the date of this announcement. The holders of
the majority of the balance of the Convertible Loan Notes, with
outstanding principal of approximately US$1.2m, have agreed to
extend the maturity date of such Convertible Loan Notes by three
years to 30 June 2018.
In addition, the Board announces details of a Fundraising,
pursuant to which Darwin Strategic Limited (the "Investor") has
conditionally agreed to subscribe up to GBP1.5m (US$2.3m) (before
expenses) for the equivalent of up to 20,000,000,000 Existing
Ordinary Shares and up to 6,666,667,000 Warrants at a price
equivalent to 0.0075 pence per Existing Ordinary Share. The
Subscription is therefore taking place at a 25 per cent. discount
to the Conversion Price.
In order to facilitate these Proposals, the Board also proposes
to effect a Share Capital Reorganisation, the effect of which will
be to consolidate the Company's Existing Ordinary Shares into New
Ordinary Shares on a one for 1,000 basis whilst retaining the
existing nominal value of the Existing Ordinary Shares.
The Conversion or extension of the maturity of the majority of
the Convertible Loan Notes is an important condition precedent to
the proposed new US$20m senior debt facility that the Company is
currently negotiating with the DFI. The Fundraising is expected to
provide sufficient working capital for the Group until the end of
Q1 2015, by which time a final decision on the DFI facility is
currently expected to have been made by the DFI.
Whilst the Company is confident in its ability to be able to
satisfy the conditions precedent to completion and drawdown of the
proposed DFI facility (including, inter alia, the completion of
these Proposals, the restructuring of the existing US$10m senior
debt facility from Vitol and the Company completing a significant
equity fundraising) there can be no guarantee that it will be able
to do so. Furthermore, there can be no guarantee that, even if the
Company is able to satisfy all of the abovementioned conditions
precedent, the DFI will ultimately agree to provide funds on the
basis currently envisaged. In the event that the proposed DFI
facility is not finalised, the Company will be forced to seek
alternative sources of potential funding which may or may not be on
similar commercial terms and may or may not be obtainable on a
timely basis or at all. If any such alternative sources of
potential funding are not available, it is highly likely that the
Company will be forced into administration.
The Fundraising and the Conversion or extension of the maturity
of the majority of the Convertible Loan Notes are each conditional
upon the passing of the Resolutions to be proposed at a General
Meeting to be held at the offices of Memery Crystal LLP, 44
Southampton Buildings, London, WC2A 1AP at 10.00 a.m. on 17
December 2014.
As explained below, completion of the Fundraising is also
conditional upon Vitol providing an undertaking to the Company to
extend the payment date of the US$4.1 million which is currently
due for repayment on 30 January 2015 under its US$10m senior debt
facility to no earlier than 31 March 2015. There is no obligation
on Vitol to do so and no guarantee that it will do so.
BACKGROUND TO THE COMPANY AND ITS OPERATIONS
The Company is focussed on building and developing a portfolio
of near term production projects in commodities relating to the
steel production industry. The Company's flagship project is the
Minas Moatize Coking Coal Project, which is an operational coal
mine in the Tete Province of Mozambique.
The Company took management control of the mine in May 2010, and
has developed the mine into an open cast operation. The Company has
delivered on a number of key operational milestones, including:
-- Upgrading of the project's JORC-compliant resource base to
86.8 million tonnes in January 2013, and the identification in
September 2013 of a total Run of Mine proven and probable reserve
(Air Dried Basis) of 39.38 million tonnes (thereby implying a life
of mine of up to 15 years);
-- Installation of a new management executive team in March 2013;
-- Execution of a 25 year mining contract with the Government of Mozambique in April 2013;
-- Completion of the initial Minas Moatize wash plant upgrade to
1.8 Mtpa and commencement of first coking coal production in May
2013;
-- Completion of long term rail access agreement to the Sena
Railway in February 2013 and delivery of 5 new locomotives and 90
wagons to Mozambique in March and April 2014; and
-- Sub-lease of the Company's entire rail fleet of 5 locomotives
and 90 wagons on the Sena Line for a minimum term of 12 months with
an extension option (on terms expected to fully offset the
Company's own lease costs for the period) as announced in October
2014.
The abovementioned sub-lease of the Company's rolling stock was
entered into as a result of the Company's mining operations being
suspended in late 2013 pending the completion of the washplant
upgrade in response to the significant fall in global coking coal
prices over the last two years. The Board has further concluded
that these difficult trading conditions are likely to persist for
another year during 2015, with a recovery in coking coal prices
only likely to commence from 2016 onwards.
As a result, the Board considers that the Company's best
operational strategy, subject to obtaining sufficient funding
(further detail on which is set out below), is to continue to
minimise its operating losses by suspending mining operations at
Minas Moatize until the expansion project is complete. The Minas
Moatize expansion project will increase the Company's wash plant
capacity to 3.2 Mtpa and is expected to reduce the Company's FOB
cash cost to approximately US$110 per saleable tonne. An envisaged
cash cost at this low level will allow the Company to become a
globally competitive producer even at the current depressed market
prices for coking coal. Assuming the successful completion of the
expansion project by 2016 which is conditional, inter alia, on the
completion of the Company's overall refinancing strategy, the
Company is expected to be in a position to restart production in
2016.
In addition to the Minas Moatize Coking Coal Project, the
Company holds mineral tenure over two large, high grade magnesite
deposits at Arthur River and Lyons River in north-western Tasmania,
Australia and majority ownership in the Changara Coal Project,
which is a coal exploration project in the Tete Province of
Mozambique.
UPDATE ON THE PROPOSED NEW SENIOR DEBT FACILITY FROM THE DFI
In March 2014, the Company received a US$20 million non-binding
offer from the DFI to provide the project finance for the Minas
Moatize expansion project. The Company has been working with the
DFI since April on their various due diligence requests and
procedures that are required to be completed by the DFI as part of
their funding approval process. The Company understands that this
due diligence process is now almost complete and anticipates
receiving a formal credit committee approved offer from the DFI in
the near term.
Approval of the DFI project finance facility is dependent on the
satisfaction of a number of conditions precedent, including, inter
alia, the completion of these Proposals, the restructuring of the
existing senior debt facility from Vitol and the Company completing
a significant equity fundraising.
Shareholders should therefore note that, even if all the
Resolutions are passed and these Proposals are completed, there is
no guarantee that the Company will be able to secure the proposed
project finance facility from the DFI as there can be no certainty
that the Company will successfully satisfy the abovementioned
latter two conditions precedent. Furthermore, there can be no
guarantee that, even if the Company is able to satisfy all of the
abovementioned conditions precedent, the DFI will ultimately agree
to provide funds on the basis currently envisaged (or at all). In
the event that the proposed new DFI facility is not finalised, the
Company will be forced to seek alternative sources of potential
funding which may or may not be on similar commercial terms and may
or may not be obtainable on a timely basis or at all. If any such
alternative sources of potential funding are not available, it is
highly likely that the Company will be forced into
administration.
CONVERSION OR EXTENSION OF THE MAJORITY OF THE OUTSTANDING
CONVERTIBLE LOAN NOTES
Background
Between July 2012 and December 2013 the Company and its
wholly-owned subsidiary, BHRM, issued approximately US$13.0m of
Convertible Loan Notes to Latitude, Vitol and certain other
investors. The Convertible Loan Notes were issued in tranches of
British Pounds Sterling, US Dollars and Australian Dollars, and
with conversion prices ranging from 1.75 pence to 5.5 pence or, in
the case of those Convertible Loan Notes denominated in Australian
Dollars, 8.2 Australian cents, as summarised in the table
below.
Series Principal Scheduled Coupon Conversion
upon Issue Maturity Price
Jul/Aug GBP2,435,255 30 Jun LIBOR + GBP0.055
2012 2015 10%
Aug 2012 A$1,454,400 30 Jun LIBOR + A$0.082
2015 10%
Nov 2012 US$4,000,000 30 Jun LIBOR + GBP0.04
2015 10%
Nov 2012 GBP500,000 30 Jun LIBOR + GBP0.04
2015 10%
Dec 2013 GBP166,666 12 Dec 12% GBP0.0175
2016
Dec 2013 US$3,333,333 12 Dec 12% GBP0.0175
2016
Interest is payable quarterly but, in the case of the
Convertible Loan Notes issued in December 2013, may at the election
of BHRM instead be capitalised. The Convertible Loan Notes are
convertible into ordinary shares in the Company at the election of
the relevant Noteholder at any time up until maturity.
Conversion
It has been agreed with the holders of approximately US$12.0m of
the Convertible Loan Notes, including Latitude and Vitol, that,
conditional upon the passing of the Resolutions, all of the
principal (including any capitalised interest) and all interest
accrued but unpaid at the time of Conversion under such Convertible
Loan Notes will Convert into an expected aggregate of the
equivalent to 88,502,098 New Ordinary Shares at 10 pence per New
Ordinary Share (following the Share Capital Reorganisation). The
precise number of New Ordinary Shares to be issued upon Conversion
will depend upon the interest that accrues ahead of such Conversion
but the precise number is not expected to deviate materially from
the expected number stated above on the assumption that Conversion
occurs immediately after the Share Capital Reorganisation on 17
December 2014 and that LIBOR does not vary from its rate as at the
Business Day immediately prior to the date of this
announcement.
It is recognised that this Conversion Price is substantially
below the originally agreed conversion prices for those Convertible
Loan Notes. However, in light of the Company's current financial
position, particularly with respect to conserving its limited cash
and progressing steps towards restructuring its balance sheet,
including ultimately replacing the existing senior debt facility
from Vitol with the DFI facility (assuming all conditions precedent
are satisfied, of which there can be no guarantees), it is
considered necessary by the Directors to agree with the relevant
Noteholders to Convert their Convertible Loan Notes now at a lower
conversion price rather than the Company being required to repay
them on maturity or seek to refinance them before maturity, neither
of which options are viewed as being viable alternatives by the
Board at this stage. A further driver behind the Conversion Price
is the fact that, by agreeing to Convert, the Converting
Noteholders are surrendering their claim to seniority over ordinary
equity holders in the event of a winding up of the Company.
Without the Conversion, the Board does not believe that it will
have any reasonable prospect of finalising the proposed DFI
facility or that it will be able to secure any alternative sources
of potential funding on similar commercial terms and/or in a timely
manner, in which event it is highly likely that the Company would
be forced into administration.
In addition, each of the Converting Noteholders has agreed that
they will not dispose of any interest in the New Ordinary Shares
issued to them upon such Conversion for a period of twelve months
from the date of Conversion (or, in the case of Latitude, from the
date of the first Conversion of its Convertible Loan Notes), save
in the event of an intervening court order or in respect of an
acceptance of a takeover offer for the Company which is open to all
Shareholders.
As the New Ordinary Shares being issued upon Conversion of the
Convertible Loan Notes are being issued in satisfaction of the
amounts owed under the Convertible Loan Notes the Company will
receive no new cash proceeds from the issue of such New Ordinary
Shares.
The allotment and issue of New Ordinary Shares upon the
Conversion of the Convertible Loan Notes requires the approval of
Shareholders under the 2006 Act, because the reduction in the
conversion price of such Convertible Loan Notes means that more
ordinary shares will be issued upon such Conversion than the number
for which Shareholder approval was granted when the Convertible
Loan Notes were originally issued.
Conversion of Latitude's Convertible Loan Notes
As at the date of this announcement, Latitude has an interest in
242,885,514 Existing Ordinary Shares representing approximately
6.24 per cent. of the Company's existing issued ordinary share
capital. Latitude also has an interest in warrants over 3,000,000
Existing Ordinary Shares exercisable at 4 pence per Existing
Ordinary Share at any time until 30 June 2015. Latitude holds
Convertible Loan Notes with outstanding principal of US$8.7m which,
with interest accrued up to and including the date of Conversion,
would Convert into an expected 65,715,342 New Ordinary Shares (on
the assumptions as to the date of Conversion and LIBOR stated
above). Taking into account the shares to be issued upon completion
of the Fundraising and the other Conversions, this would give
Latitude an aggregate interest of in excess of 30 per cent. of the
enlarged issued ordinary share capital of the Company.
Under Rule 9 of the Takeover Code any person who acquires,
whether by a series of transactions over a period of time or not,
an interest in shares in a company which (when taken together with
shares in which persons acting in concert with him are interested)
carry 30 per cent. or more of the voting rights of that company, or
any person, together with persons acting in concert with him, who
is interested in shares which in aggregate carry not less than 30
per cent. of the voting rights of a company but does not hold
shares carrying more than 50 per cent. of such voting rights and
such person, or any other person acting in concert with him,
acquires an interest in any other shares which increases the
percentage of shares carrying voting rights in which he is
interested, such person will normally be required to make an offer
to the holders of shares in that company to acquire all of the
shares in that company not held by him or persons acting in concert
with him. Such an offer would have to be made in cash, or be
accompanied by a cash alternative, at not less than the highest
price paid for any interest in shares by that person or by any
person acting in concert with him within the 12 months prior to the
announcement of such offer.
Latitude would not be prepared to agree to Convert its
Convertible Loan Notes if as a result it was required to make an
offer for the Company. Accordingly, it has been agreed with
Latitude that upon completion of the Conversion, Latitude will only
be issued with such number of New Ordinary Shares as, together with
its existing holding, would result in it having an interest in not
more than 29.9 per cent. of the Company's issued ordinary share
capital at such time. Thereafter, the Company may, at the Company's
sole election, in one or more tranches, Convert additional amounts
outstanding under Latitude's Convertible Loan Notes and issue
additional New Ordinary Shares to Latitude, provided that at such
time Latitude would not as a result have an interest in more than
29.9 per cent. of the Company's issued ordinary share capital.
Meanwhile, no further interest will accrue on the outstanding
principal amount of those Convertible Loan Notes that have not been
Converted. Provided that the initial Conversion of Latitude's
Convertible Loan Notes takes place, Latitude has undertaken to
defer the maturity of its unconverted Convertible Loan Notes until
the date that is five years from the date of such initial
Conversion, not to exercise its rights of Conversion under such
Convertible Loan Notes until such date and not to exercise any of
its 3,000,000 warrants or otherwise acquire any interest in
ordinary shares of the Company if as a result it would be obliged
to make a mandatory offer for the Company pursuant to Rule 9 of the
Takeover Code (save where such acquisition falls within a
dispensation to Rule 9 or is accompanied by an offer for the
Company made in accordance with the Takeover Code). In all other
material respects the terms of Conversion agreed with Latitude are
identical to the terms of Conversion agreed with Vitol and the
other Converting Noteholders.
Assuming that all of the Resolutions are passed at the General
Meeting, and based on the assumptions as to the date of Conversion
and LIBOR stated above, it is expected that immediately following
the Share Capital Reorganisation a total of 42,536,756 New Ordinary
Shares will be allotted and issued upon Conversion of which it is
currently anticipated that 19,750,000 New Ordinary Shares will be
issued to Latitude, leaving a balance of 45,965,342 New Ordinary
Shares to be issued to Latitude at the sole election of the Company
in accordance with the agreement summarised above. It is the
Company's current intention that such balance would be issued to
Latitude in one tranche at such time as the Company raises
significant additional equity funds in conjunction with the
completion of the proposed new senior debt facility with the DFI
(assuming all conditions precedent are satisfied, of which there
can be no guarantees). If prior to the Conversion more Existing
Ordinary Shares are issued, for example as a result of the exercise
by any person of options, warrants or other convertible
instruments, then a commensurately larger number of New Ordinary
Shares could be issued to Latitude upon the initial Conversion of
its Convertible Loan Notes.
Extension of Maturity Date
Separately, it has been agreed with the holders of all of the
Convertible Loan Notes denominated in Australian Dollars (equating
to approximately US$1.2m) that, conditional upon the passing of the
Resolutions, the maturity date of such Convertible Loan Notes will
be extended by three years to 30 June 2018. In all other respects
the terms of such Convertible Loan Notes, including their
conversion prices (save for any consequential amendments due to the
Share Capital Reorganisation), will remain unaffected.
One holder of Convertible Loan Notes with outstanding principal
of approximately US$0.2m has not agreed to either Convert or extend
the maturity date of those Convertible Loan Notes, which will
remain with a maturity date of 30 June 2015 and with their existing
conversion price (save for any consequential amendments due to the
Share Capital Reorganisation).
TERMS OF THE FUNDRAISING
The Company has conditionally raised up to GBP1.5 million gross
at 7.5 pence per New Ordinary Share for the allotment of up to
20,000,000 New Ordinary Shares to the Investor (equivalent to up to
20,000,000,000 Existing Ordinary Shares at 0.0075 pence per
Existing Ordinary Share prior to the Share Capital
Reorganisation).
The Investor is also to be granted 6,666,667 Warrants on the
basis of one Warrant for every three Subscription Shares
subscribed. Each Warrant is exercisable at a price of 15 pence per
New Ordinary Share (equivalent to 0.015 pence per Existing Ordinary
Share) for a period of three years from the date of grant.
In addition, the Investor may be granted Anti-Dilution Warrants
exercisable at par value to protect it from dilution if the Company
issues any further New Ordinary Shares (subject to certain
exceptions) for cash at a price of less than 7.5 pence per share
within 180 days of completion of the Fundraising.
The number of Subscription Shares and Warrants to be issued and
granted upon completion of the Fundraising will be capped to the
extent that, at the time of issue, the Investor (together with any
persons acting in concert with it) would have an interest in more
than 29.9 per cent. of the Company's issued share capital. If the
issue of Subscription Shares does need to be capped then the
balance of the Subscription Shares and Warrants would be issued
four weeks later, again subject to the same 29.9 per cent. limit.
To the extent that any remaining balance after the four week period
would continue to breach the 29.9 per cent. limit, then the size of
the Fundraising will be adjusted downwards accordingly and the
proceeds of the Fundraising would be commensurately lower.
Notwithstanding the above, it is the Company's current
expectation, based on the current Fundraising and Conversion
assumptions and the Investor's existing holding in the Company,
that upon completion of the Fundraising the Company will be able to
issue all of the Subscription Shares and grant all of the Warrants
to the Investor, which would result in the Investor (together with
any persons acting in concert with it) having an aggregate interest
in approximately 29.7 per cent. of the Enlarged Share Capital. The
Company therefore expects, as at the date of this announcement, and
assuming the Resolutions are approved and the Company is not in
breach of any terms of the agreement governing the Fundraising, to
receive the full GBP1,500,000 (gross) of the proceeds of the
Fundraising. However, this amount would reduce to the extent that
the Investor acquires any Existing Ordinary Shares (including by
the exercise of any June 2014 Warrants, September 2014 Warrants or
Anti-Dilution Warrants held by it) prior to the initial completion
of the Fundraising.
The Investor has undertaken that it will not exercise Warrants
or Anti-Dilution Warrants, or otherwise acquire any interest in
ordinary Shares in the Company, if as a result it would be obliged
to make a mandatory offer for the Company pursuant to Rule 9 of the
Takeover Code.
The allotment and issue of the Subscription Shares, Warrants and
any future Anti-Dilution Warrants requires (and the Fundraising is
therefore conditional upon) the approval of Shareholders at the
General Meeting, where Resolutions will be proposed to grant the
Directors authority pursuant to the 2006 Act to allot such
Subscription Shares, Warrants and Anti-Dilution Warrants.
The Fundraising is also conditional upon Vitol having undertaken
to the Company to extend the payment date of the US$4.1 million
which is currently due for repayment on 30 January 2015 under its
US$10m senior debt facility to no earlier than 31 March 2015. There
is no obligation on Vitol to do so. If Vitol does not provide this
undertaking then, unless the Investor agrees to waive this
condition (which it is not obliged to do) the Fundraising will not
complete and the Company will be forced to seek alternative sources
of potential funding which may or may not be on similar commercial
terms and may or may not be obtainable on a timely basis or at all.
If any such alternative sources of potential funding are not
available, it is highly likely that the Company will be forced into
administration.
THE SHARE CAPITAL REORGANISATION
Terms of the Share Capital Reorganisation
Under English company law, a company is not allowed to issue
shares at a price per share which is lower than the nominal value
of its shares. The Subscription Price for the Fundraising is the
equivalent of 0.0075 pence per Existing Ordinary Share, which is
below the current nominal value of the Existing Ordinary Shares. In
addition, the Directors consider that an issued share capital
numbering billions of shares is not manageable or conducive to
future fundraisings.
Accordingly, subject to Shareholder approval, the Directors
propose to reorganise the Company's share capital as explained
below with a view to reducing the number of ordinary shares in
issue by a factor of 1,000 whilst maintaining the same low nominal
value.
The terms of the proposed Share Capital Reorganisation are such
that on the Record Time every 1,000 Existing Ordinary Shares of
0.01 pence each will be consolidated into one New Ordinary Share of
0.01 pence and one 'C' Deferred Share of 9.99 pence.
Save as explained below with regards to fractional entitlements,
following the Share Capital Reorganisation each Shareholder will
hold such number of New Ordinary Shares as is equal to 1/1,000th of
the number of Existing Ordinary Shares that he or she held
immediately beforehand, but the nominal value of the New Ordinary
Shares will remain as 0.01 pence.
The New Ordinary Shares resulting from the Share Capital
Reorganisation will have exactly the same rights as those currently
accruing to the Existing Ordinary Shares under the Company's
articles of association, including those relating to voting and
entitlement to dividends.
The 'C' Deferred Shares created pursuant to the Share Capital
Reorganisation will have no voting rights or rights to receive a
dividend, will have only a very limited right to any distribution
on a return of capital and are non-transferable. They will not be
listed on AIM. Accordingly, the 'C' Deferred Shares will be
practically worthless. The full rights attaching to the 'C'
Deferred Shares are set out in Resolution 2 of the Notice of
General Meeting, which, if passed, will amend the Company's
Articles of Association to set out the rights of the 'C' Deferred
Shares. Shareholders should note that the Company has Existing
Deferred Shares in issue which similarly have no voting rights or
rights to receive a dividend and only have a very limited right to
any distribution on a return of capital, and so are similarly
worthless. The 'C' Deferred Shares rank behind the Existing
Deferred Shares upon a distribution of capital but it is extremely
unlikely in practice that any class of deferred share would receive
any distribution on a liquidation of the Company.
Resolutions 1 and 2 contained in the Notice of General Meeting
at the end of the circular convening the General Meeting (the
"Circular"), which will be posted to Shareholders today, will, if
passed by Shareholders, effect the proposed Share Capital
Reorganisation as detailed above. The passing of Resolution 1
effects the consolidation and redesignation of the Existing
Ordinary Shares into New Ordinary Shares and 'C' Deferred Shares
and the passing of Resolution 2 effects the amendments to the
Company's Articles of Association to set out the rights of the 'C'
Deferred Shares. If approved, the Share Capital Reorganisation will
take place at 6.00 p.m. on 17 December 2014 and admission to
trading and dealings in the New Ordinary Shares will become
effective at 8.00 a.m. on 18 December 2014.
A copy of the Company's Articles of Association, showing the
intended amendments to be made by Resolution 2, can be viewed at
the Company's website - www.bhrplc.com - and will be made available
for inspection at the General Meeting.
Fractional Entitlements
Under the Company's Articles of Association, if as a result of
the Share Capital Reorganisation any Shareholders would become
entitled to fractions of a New Ordinary Share, the Directors are
entitled, on behalf of such Shareholders, to sell the shares
representing the fractions for the best price reasonably obtainable
and distribute the net proceeds of sale in due proportion amongst
those Shareholders, provided that any amount otherwise due to a
Shareholder which is less than GBP3 may be retained for the benefit
of the Company. Given the Company's current share price it is not
expected that any such amounts would be distributed to
Shareholders. Shareholders who hold fewer than 1,000 Existing
Ordinary Shares at the Record Time will not receive any New
Ordinary Shares or 'C' Deferred Shares.
To facilitate the Share Capital Reorganisation, following the
General Meeting but prior to the Record Time the Company Secretary
will subscribe for such number of Existing Ordinary Shares (being
fewer than 1,000 Existing Ordinary Shares) as is necessary to
ensure that the Company's issued ordinary share capital is
divisible by exactly 1,000.
Share Certificates and CREST entitlements
If you hold your Existing Ordinary Shares in certificated form
you will receive a new share certificate representing your New
Ordinary Shares following the Share Capital Reorganisation. If you
hold your Existing Ordinary Shares in uncertificated form, the
shares held in your CREST account will be updated accordingly.
Shareholders will not be issued with a share certificate in
respect of the 'C' Deferred Shares.
CONSEQUENTIAL ADJUSTMENT TO OPTIONS, WARRANTS AND ANTI-DILUTION
WARRANTS AND GRANT OF NEW ANTI-DILUTION WARRANTS
There are certain consequences of the Share Capital
Reorganisation, the issue of the Subscription Shares at the
Subscription Price and the Conversion.
First, as a result of the Share Capital Reorganisation, certain
changes will be made to the terms of the Company's existing granted
options, warrants and other convertible securities, including the
June 2014 Warrants and the September 2014 Warrants and all
Anti-Dilution Warrants previously granted and those Convertible
Loan Notes that are not Converting under the Proposals.
Essentially, due to the one for 1,000 consolidation of the
Company's ordinary share capital, the number of ordinary shares
into which such securities will convert will be reduced by a factor
of 1,000 and the price at which ordinary shares may be subscribed
for pursuant to such securities will be multiplied by a factor of
1,000 (except for the Anti-Dilution Warrants, which are always
exercisable at the prevailing nominal value of the Company's
ordinary shares).
Secondly, in accordance with their terms, the exercise price of
any unexercised June 2014 Warrants and September 2014 Warrants
granted to certain investors (including the Investor) in the
fundraisings announced by the Company in June and September 2014
will automatically reduce to the Subscription Price of 7.5 pence
(on a post-Share Capital Reorganisation basis).
Finally, the Investor, as an investor in the September 2014
fundraising, will in accordance with the terms of that fundraising
be issued in aggregate 1,575,894 Anti-Dilution Warrants (on a
post-Share Capital Reorganisation basis) as a result of the issue
of New Ordinary Shares under the Conversion and the Fundraising,
each entitling the Investor to subscribe for a New Ordinary Share
at the nominal value of the New Ordinary Shares from time to time.
The number of these Anti-Dilution Warrants exceeds the number that
the Directors were authorised to grant at the time of the September
2014 fundraising and accordingly Resolutions 3(e) and 4(e) will, if
passed, approve such grant.
Notwithstanding these consequences, the Independent Directors
believe that the Share Capital Reorganisation, the Fundraising and
the Conversion are all in the best interests of the Company and the
Shareholders as a whole.
Following completion of the Proposals, the Company's existing
historic share option awards to Directors, senior management and
employees, which currently have minimal intrinsic value, will be
reviewed and new retention and incentivisation arrangements
considered by the Board's independent non-executive remuneration
committee as well as the Company's full Board. Any new options
granted to Directors, senior management and employees, together
with existing outstanding options to such persons, would remain
within the limit on the Company's share option plan, being no more
than 15 per cent. of the Company's issued share capital from time
to time.
GENERAL MEETING
Set out at the end of the Circular, which will be posted to
Shareholders today, is a notice convening the General Meeting to be
held at the offices of Memery Crystal LLP, 44 Southampton
Buildings, London WC2A 1AP on 17 December 2014 at 10.00 a.m.at
which the following Resolutions will be proposed:
Resolution 1 - an ordinary resolution to effect the Share
Capital Reorganisation.
Resolution 2 - a special resolution to amend the Company's
Articles of Association to set out the rights of the 'C' Deferred
Shares.
Resolution 3 - an ordinary resolution to grant the Directors
authority under section 551 of the 2006 Act to allot:
(a) New Ordinary Shares upon the Conversion of Convertible Loan
Notes under the Proposals;
(b) the Subscription Shares;
(c) the Warrants;
(d) the Anti-Dilution Warrants which may potentially be granted
to the Investor in future under the terms of the Fundraising;
(e) the Anti-Dilution Warrants to be granted as a consequence of
the Proposals and in respect of which further Shareholder authority
is required; and
(f) additional securities with a nominal value of up to
approximately 15 per cent. of the issued share capital of the
Company as enlarged by the issue of the Subscription Shares and
full Conversion of the Convertible Loan Notes that are to be
Converted.
Resolution 4 - a special resolution under section 570 of the
2006 Act to disapply the pre-emption rights on the allotment of
equity securities pursuant to the 2006 Act in respect of the
allotment of:
(a) New Ordinary Shares upon the Conversion of Convertible Loan
Notes under the proposals;
(b) the Subscription Shares;
(c) the Warrants;
(d) the Anti-Dilution Warrants which may potentially be granted
to the Investor in future under the terms of the Fundraising;
(e) the Anti-Dilution Warrants to be granted as a consequence of
the Proposals and in respect of which further Shareholder authority
is required;
(f) equity securities upon a rights issue, open offer or similar
pre-emptive offer to Shareholders; and
(g) additional equity securities with a nominal value of up to
approximately 15 per cent. of the issued share capital of the
Company as enlarged by the issue of the Subscription Shares and
full Conversion of the Convertible Loan Notes that are to be
Converted.
The authorities referred to in each of Resolutions 3(a) to (e)
inclusive and 4(a) to (e) inclusive will expire on the date falling
five years from the date of the passing of those Resolutions. The
authorities referred to in Resolutions 3(f), 4(f) and 4(g) will
expire on the date falling 15 months from the date of the passing
of those Resolutions or, if earlier, the conclusion of the 2015
Annual General Meeting of the Company.
Shareholders should note that the authorities in Resolutions
3(a) and 4(a) in relation to the allotment of New Ordinary Shares
upon Conversion state a maximum nominal value of such New Ordinary
Shares which has been calculated based on certain assumptions as to
the number of such New Ordinary Shares that the Company will be
required to issue upon Conversion, rounded up to allow for any
reasonable variation. The precise number of New Ordinary Shares to
be issued upon Conversion will depend upon the interest that
accrues ahead of such Conversion but is not expected to deviate
materially from the expected number on the assumption that
Conversion occurs immediately after the Share Capital
Reorganisation on 17 December 2014 and that LIBOR does not vary
from its rate as at the Business Day immediately prior to the date
of this announcement. In the unlikely event that a greater number
of New Ordinary Shares was required to be allotted upon Conversion
than were permitted under Resolutions 3(a) and 4(a) then such
excess would be allotted pursuant to the general authorities to be
granted under Resolutions 3(f) and 4(g).
Shareholders should also note that the authorities in
Resolutions 3(d) and 4(d) include authority to grant up to
10,000,000 Anti-Dilution Warrants. However, depending on the terms
at which the Company issues any New Ordinary Shares in
circumstances that would require the Company to grant Anti-Dilution
Warrants to the Investor, and the number of Subscription Shares
still held by the Investor at the time, the number of Anti-Dilution
Warrants that the Company is required to grant could exceed
10,000,000, in which case the Company has undertaken to the
Investor that it would convene a further general meeting at which
resolutions will be proposed to grant authority to the Directors to
grant such additional Anti-Dilution Warrants.
Completion of the Fundraising and the Conversion or extension of
maturity of the majority of the Convertible Loan Notes is
conditional upon the passing of all of the Resolutions. If any
Resolution is not passed then the Fundraising and such Conversion
or maturity extension will not complete, the Company will most
likely not have adequate working capital past the end of 2014, and
the Company's ability to conclude the proposed new senior debt
facility discussions with the DFI will be severely compromised.
As explained above, completion of the Fundraising is also
conditional upon Vitol having undertaken to the Company to extend
the payment date of the US$4.1 million which is currently due for
repayment on 30 January 2015 under its US$10m senior debt facility
to no earlier than 31 March 2015. There is no obligation on Vitol
to do so and no guarantee that it will do so.
Shareholders should also note that there can be no guarantee
that the Company will secure the proposed new senior debt facility
from the DFI. The completion of such facility will be conditional
upon, amongst other things, the completion of these Proposals, the
restructuring of the existing senior debt facility from Vitol and
the Company completing a significant equity fundraising. There is
no certainty that the Company will be able successfully to satisfy
all or any of these requirements.
RELATED PARTY TRANSACTIONS
Latitude
Latitude has an interest in 242,885,514 Existing Ordinary Shares
representing 6.24 per cent. of the Company's existing issued
ordinary share capital. Latitude also has an interest in warrants
over 3,000,000 Existing Ordinary Shares which, following the Share
Capital Reorganisation, will become warrants over 3,000 New
Ordinary Shares exercisable at GBP40 per New Ordinary Share.
At Latitude's request, Cristian Ramirez was appointed to the
Board as a Non-Executive Director in May 2013 to represent the
interests of Latitude in the Company. As a result, Latitude is
deemed to be a related party of the Company for the purposes of the
AIM Rules for Companies.
Upon the full Conversion of its Convertible Loan Notes, Latitude
will be entitled to be issued in aggregate an expected 65,715,342
New Ordinary Shares (on the basis of the assumptions as to the date
of Conversion and LIBOR outlined above). As explained above, the
initial Conversion of Latitude's Convertible Loan Notes will be
capped at an expected 19,750,000 New Ordinary Shares which, upon
such Conversion, will result in Latitude holding in aggregate
19,992,885 New Ordinary Shares representing approximately 29.9 per
cent. of the Enlarged Share Capital. However, if prior to the
Conversion more Existing Ordinary Shares are issued, for example as
a result of the exercise by any person of options, warrants or
other convertible instruments, then a commensurately larger number
of New Ordinary Shares could be issued to Latitude upon the initial
Conversion of its Convertible Loan Notes. Further Conversion of the
balance of Latitude's Convertible Loan Notes will be at the sole
discretion of the Company, at the same Conversion price of 10 pence
per New Ordinary Share, provided that at no time may the Company
Convert such Convertible Loan Notes if as a result Latitude would
have an interest, in aggregate, in more than 29.9 per cent. of the
Company's issued ordinary share capital. Save for this restriction,
and the other restrictions on Latitude set out above, in all other
material respects the terms of Latitude's Conversion are identical
to those of the other Converting Noteholders.
Cristian Ramirez, who was appointed to the Board as a nominee of
Latitude, has not taken part in the decision to recommend the
Proposals. Such matters have been dealt with solely by the
Directors other than Mr Ramirez (the "Independent Directors").
The Independent Directors consider, having consulted with the
Company's nominated adviser, Strand Hanson, that for the reasons
set out under the section headed "Conversion or extension of the
majority of the outstanding Convertible Loan Notes" above, the
terms of the Conversion of Latitude's Convertible Loan Notes are
fair and reasonable insofar as Shareholders are concerned. In
providing its advice to the Independent Directors, Strand Hanson
has taken into account the commercial assessments of the
Independent Directors.
Darwin Strategic Limited
Darwin, the Investor in the Fundraising, has in the previous 12
months held, in aggregate, over 10 per cent. of the issued ordinary
share capital of the Company and is therefore deemed to be a
related party of the Company for the purposes of the AIM Rules for
Companies.
Darwin has subscribed for up to 20,000,000 Subscription Shares
and 6,666,667 Warrants in the Fundraising, will receive in
aggregate 1,575,894 Anti-Dilution Warrants on top of its existing
holding of 127,265,103 existing Anti-Dilution Warrants (equivalent
to 127,265 Anti-Dilution Warrants following the Share Capital
Reorganisation) and the exercise price of the 99,999,999 June 2014
Warrants and 175,000,000 September 2014 Warrants held by Darwin
(equivalent to 99,999 June 2014 Warrants and 175,000 September 2014
Warrants respectively following the Share Capital Reorganisation)
will reduce to 7.5 pence.
The Directors consider, having consulted with the Company's
nominated adviser, Strand Hanson, that for the reasons set out
under the section headed "Terms of the Fundraising" above, the
terms of the participation of Darwin in the Fundraising, including
the consequential grant of Anti-Dilution Warrants and reduction in
the exercise price of Darwin's June 2014 Warrants and September
2014 Warrants, are fair and reasonable insofar as Shareholders are
concerned. In providing its advice to the Company, Strand Hanson
has taken into account the commercial assessments of the
Directors.
RECOMMENDATION
The Independent Directors consider the Proposals to be fair and
reasonable and in the best interests of the Company and its
Shareholders as a whole and accordingly the Independent Directors
recommend that Shareholders vote in favour of all of the
Resolutions at the General Meeting, as they intend to do in respect
of their own shareholdings of 2,500,000 Existing Ordinary Shares,
representing approximately 0.1 per cent. of the Company's existing
issued ordinary share capital.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication of the Circular 1 December 2014
Latest time and date for 10.00 a.m. on 15
receipt of Forms of Proxy December 2014
from Shareholders
General Meeting 10.00 a.m. on 17
December 2014
Latest date for dealings 17 December 2014
in Existing Ordinary Shares
and for registration of
transfers
Record Time for the Share 6.00 p.m. on 17 December
Capital Reorganisation 2014
and completion of the
Fundraising and the Conversion
Admission effective and 8.00 a.m. on 18 December
dealings expected to commence 2014
in the New Ordinary Shares,
including those issued
as a result of the Fundraising,
the Conversion (except
for any balance of New
Ordinary Shares potentially
to be issued to Latitude
at a later date) and the
Fee Shares
CREST accounts expected 18 December 2014
to be credited (where
applicable) with New Ordinary
Shares, including those
issued as a result of
the Fundraising, the Conversion
(except for any balance
of New Ordinary Shares
potentially to be issued
to Latitude at a later
date) and the Fee Shares
Dispatch of definitive By 31 December 2014
share certificates (where
applicable) in respect
of New Ordinary Shares,
including those issued
as a result of the Fundraising,
the Conversion (except
for any balance of New
Ordinary Shares potentially
to be issued to Latitude
at a later date) and the
Fee Shares
Notes:
1. References to times and dates in this announcement are to
times and dates in London unless otherwise specified.
2. If any of the above times or dates should change, the revised
times and/or dates will be notified to Shareholders, via an
announcement through a Regulatory Information Service.
3. Temporary documents of title will not be issued.
**ENDS**
APPENDIX
Table of Definitions
Capitalised terms used but not defined in the body of this
announcement have the meanings set out below.
"2006 Act" the Companies Act 2006
(as amended)
"Admission" admission to trading on
AIM of the New Ordinary
Shares, including those
issued as a result of the
Fundraising, the Conversion
(except for any balance
of New Ordinary Shares
potentially to be issued
to Latitude at a later
date) and the Fee Shares,
becoming effective
"AIM" the market of that name
operated by London Stock
Exchange plc
"AIM Rules for Companies" the AIM Rules for Companies
published by the London
Stock Exchange, as amended
from time to time
"Air Dried Basis" the quality parameter reported
as a proportion of the
material after it has been
dried. On this basis, moisture
content is less, but all
other parameters will be
higher
"Anti-Dilution Warrants" warrants over ordinary
shares granted or to be
granted to those persons
who invested in the fundraisings
conducted by the Company
in June 2014 and September
2014, or who are investing
in the Fundraising, in
certain circumstances if
the Company issues new
ordinary shares for cash
(with certain exceptions)
at prices below the subscription
prices for such fundraisings
"Articles" or "Articles the articles of association
of Association" of the Company
"BHRM" BHR Investments Mauritius
Limited, a wholly-owned
subsidiary of the Company
"Business Day" a day (other than a Saturday,
Sunday or public holiday)
on which commercial banks
are open for general business
in London
"'C' Deferred Shares" the proposed new 'C' class
deferred shares of 9.99
pence each in the capital
of the Company to be created
pursuant to the Share Capital
Reorganisation
"Conversion" the conversion by the Converting
Noteholders of all amounts
of principal and interest
accrued under the Convertible
Loan Notes held by them
into New Ordinary Shares,
as described in this announcement,
and "Convert" shall be
construed accordingly
"Convertible Loan convertible loan notes
Notes" issued in various currencies
with an aggregate principal
amount equal to approximately
US$13.4m entered into by
the Company, BHRM and each
of Latitude, Vitol and
certain other persons between
July 2012 and December
2013
"Converting Noteholders" those Noteholders, including
Latitude and Vitol, who
have agreed to Convert
their Convertible Loan
Notes with an aggregate
principal amount equal
to approximately US$12.0m
"Conversion Price" 10 pence per New Ordinary
Share (which is equivalent
to 0.01 pence per Existing
Ordinary Share)
"CREST" the relevant system (as
defined in the CREST Regulations)
for the paperless settlement
of trades and the holding
of uncertificated securities
in the United Kingdom administered
by Euroclear UK & Ireland
Limited as operator (as
defined in the CREST Regulations)
"CREST Regulations" the Uncertificated Securities
Regulations 2001 (SI 2011/3755),
as amended
"DFI" a development finance institution
owned by the South African
government which was established
to promote economic growth
and industrial development
"Directors" or "Board" the board of directors
of the Company
"Enlarged Share Capital" the total number of New
Ordinary Shares in issue
upon completion of the
Conversion, the Fundraising
and the issue of the Fee
Shares (but excluding the
balance of New Ordinary
Shares potentially to be
issued to Latitude at a
future date under the Conversion)
"Existing Deferred the 83,000,000 existing
Shares" deferred shares of 0.99
pence each in the capital
of the Company and the
existing 2,486,943,957
'B' deferred shares of
0.24 pence each in the
capital of the Company
"Existing Ordinary the existing ordinary shares
Shares" of 0.01 pence each in the
capital of the Company
"FCA" the United Kingdom's Financial
Conduct Authority (formerly
the Financial Services
Authority)
"Fee Shares" the 852,733 New Ordinary
Shares to be issued to
Strand Hanson
"FOB" free on board
"Fundraising" the conditional fundraising
of up to GBP1,500,000 constituted
by the issue of Subscription
Shares and the grant of
the Warrants to the Investor
at the Subscription Price
"General Meeting" the general meeting of
the Shareholders of the
Company which will be held
at the offices of Memery
Crystal LLP, 44 Southampton
Buildings, London WC2A
1AP at 10.00 a.m. on 17
December 2014, at which
the Resolutions will be
proposed
"Group" the Company and its subsidiaries
"Independent Directors" the Directors, other than
Cristian Ramirez, who is
the Board representative
of Latitude
"Investor" Darwin Strategic Limited,
the subscriber for the
Subscription Shares and
Warrants in the Fundraising
"JORC" the Australasian code for
reporting of exploration
results, mineral resources
and ore reserves as published
by the Joint Ore Reserves
Committee of The Australasian
Institute of Mining and
Metallurgy, Australian
Institute of Geoscientists
and Minerals Council of
Australia
"June 2014 Warrants" the 600,000,000 warrants
over Existing Ordinary
Shares (equivalent to 600,000
New Ordinary Shares) granted
to certain investors pursuant
to the fundraising conducted
by the Company in June
2014
"Latitude" Latitude Zero Financial
Investment Fund, a company
incorporated and registered
in the Cayman Islands,
with company number 145324
whose registered office
is at CARD Corporate Services
Ltd, Zephyr House, 122
Mary Street, P.O. Box 709,
Grand Cayman, Cayman Islands,
British West Indies
"LIBOR" London Interbank Offered
Rate
"London Stock Exchange" London Stock Exchange plc
"Mtpa" million tonnes per annum
"New Ordinary Shares" the proposed new ordinary
shares of 0.01 pence each
in the capital of the Company
following implementation
of the proposed Share Capital
Reorganisation
"Noteholders" the holders of the Convertible
Loan Notes, including Latitude
and Vitol
"Proposals" the proposed Fundraising,
Share Capital Reorganisation,
Conversion or extension
of the maturity date of
the majority of the Convertible
Loan Notes, and the proposal
of the Resolutions at the
General Meeting, as described
in this announcement
"Record Time" the record date and time
for implementation of the
Share Capital Reorganisation,
being 6.00 p.m. on 17 December
2014 (or, if the General
Meeting is adjourned, 6.00
p.m. on the date of the
passing of the Resolutions)
"Regulatory Information any information service
Service" authorised from time to
time by the FCA for the
purpose of disseminating
regulatory announcements
"Resolutions" the resolutions to be proposed
at the General Meeting,
as summarised in this announcement
and set out in more detail
in the notice of the General
Meeting attached to the
Circular
"run of mine" or mined ore of a size that
"ROM" can be processed without
further crushing
"September 2014 Warrants" the 625,000,000 series
'B' warrants over Existing
Ordinary Shares (equivalent
to 625,000 New Ordinary
Shares)granted to certain
investors pursuant to the
fundraising conducted by
the Company in September
2014
"Share Capital Reorganisation" the proposed consolidation
on a one for 1,000 basis
and redesignation of the
Existing Ordinary Shares
of 0.01 pence into New
Ordinary Shares of 0.01
pence and 'C' Deferred
Shares of 9.99 pence, to
be effected by Resolutions
1 and 2 to be proposed
at the General Meeting
"Shareholders" the holders of Existing
Ordinary Shares or (following
the Record Time) New Ordinary
Shares from time to time
"Strand Hanson" Strand Hanson Limited,
the financial and nominated
adviser to the Company
"Subscription Price" 7.5 pence per New Ordinary
Share (which is equivalent
to 0.0075 pence per Existing
Ordinary Share)
"Subscription Shares" 20,000,000 New Ordinary
Shares
"Takeover Code" The City Code on Takeovers
and Mergers
"UK" or "United Kingdom" the United Kingdom of Great
Britain and Northern Ireland,
its territories and dependencies
"US", "USA" or "United the United States of America,
States of America" each state thereof, its
territories and possessions,
and all areas subject to
its jurisdiction
"Vitol" Vitol Coal S.A.
"Warrants" up to 6,666,667 Series
'C' Warrants to be granted
to the Investor pursuant
to the Fundraising to subscribe
for additional New Ordinary
Shares at 15 pence per
New Ordinary Share (subject
to adjustment)
References to "GBP", "pence" and "p" are to British pounds and
pence sterling, the currency of the United Kingdom. References to
"US$" are to United States Dollars, the currency of the United
States of America. References to "A$" are to Australian Dollars,
the currency of Australia.
For the purposes of this announcement the following exchange
rates have been used:
GBP : US$ 1.56 (being the GBP : US$ exchange
rate on the last Business
Day prior to the date of this
announcement)
---------- ----- -------------------------------
GBP : A$ 1.84 (being the GBP : A$ exchange
rate on the last Business
Day prior to the date of this
announcement)
---------- ----- -------------------------------
A$ : US$ 0.85 (being the A$ : US$ exchange
rate on the last Business
Day prior to the date of this
announcement)
---------- ----- -------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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