Conditional Conversion of Cyrus $12.5m debt
11 May 2009 - 6:13PM
UK Regulatory
TIDMAGU
RNS Number : 0087S
Angus & Ross PLC
11 May 2009
ANGUS & ROSS PLC
("the Company")
AIM: AGU.L
Conditional Conversion of Cyrus $12.5M debt
The Company has entered into a conditional agreement with Cyrus Capital
Partners, LP ("Cyrus") and FBC Sarl (an associated company of Cyrus) to
restructure its current senior secured debt facility ("Cyrus Facility"). The
restructuring will provide financial stability to the Company by removing the
current interest burden, extending the maturity and providing flexibility to
raise new debt financing. It is intended that the restructuring will enable the
Company to continue its development of the Black Angel zinc/lead mine,
facilitate the proposed acquisition of the Nalunaq gold mine and bring it into
production.
Restructuring Terms
* The existing Cyrus Facility will be cancelled and replaced with new $12.5
million convertible secured loan notes ("Loan Notes")
* The Loan Notes will not bear interest and are redeemable by the Company on 31
December, 2012
* The Loan Notes are convertible at any time at the option of the note holders
into an aggregate of 577,275,643 ordinary shares of 1 penny in the capital of
the Company ("Ordinary Shares")
* Existing warrants held by Cyrus are to be cancelled
* Loan Notes are to be structured to permit security rights to be granted to the
provider of project finance (subject to the approval of the note holders), which
is expected to form a major part of funding the opening of the Black Angel
zinc/lead mine in Greenland.
FBC Sarl has conditionally subscribed for the Loan Notes in exchange for the
cancellation of the Cyrus Facility.
The subscription by FBC Sarl is conditional, inter alia, upon shareholder
approval of the Loan Notes and the Company amending its articles of association
to create a special class of share which will be issued to FBC Sarl. This share
('B' Share) will entitle FBC Sarl to the same number of votes at general
meetings of the Company as it would have if the Loan Notes had converted. The
rights attaching to the 'B' Share will fall away once the Loan Notes have been
converted.
As announced on 27 April 2009, the Company raised GBP600,000 by way of a placing
and has entered into a GBP5.0 million standby equity distribution agreement
("SEDA") with YA Global Master SPV Ltd, which was advised by Yorkville Advisors,
LLC. The SEDA enables the Company, at its discretion during the next 32 months,
to draw down funds in tranches in exchange for the issue of new Ordinary Shares
on terms related to the prevailing market price at the time of each draw down.
The Loan Notes are convertible at the option of the note holder into 577,275,643
Ordinary Shares. Prior to the recent fundraising, the Company had 212,016,203
Ordinary Shares in issue. This figure has been increased to 245,316,533 as a
result of the fundraising and will increase further as cash is drawn on the
SEDA. The percentage of the Ordinary Shares owned by FBC Sarl on conversion of
the Loan Notes in full would be 70.18 % prior to any draw downs on the SEDA. Any
issue of Ordinary Shares pursuant to the SEDA will subsequently reduce Cyrus'
percentage holding on conversion of the Loan Notes.
Unless previously converted, the Loan Notes are redeemable on 31 December 2012
and may, at the note holder's option be redeemed prior to that date upon a
change of control and upon a future issue of shares or convertible loan notes
which raises in excess of $5m. In the event of an early redemption, the Loan
Notes will be redeemed at 105% of par value.
The Loan Notes will have the benefit of the same security as the Cyrus Facility
until such time as the Company secures bank finance on terms satisfactory to the
note holders.
Whilst the Loan Notes remain outstanding the note holders holding a majority of
the loan notes will have the right to approve the identity of no less than three
directors of the Company and the maximum number of directors will not exceed
six. A representative of Cyrus, subject to approvals, will join the board. A
further announcement will be made at the appropriate time.
As part of the terms of the issue of the Loan Notes, 37.5 million warrants
exercisable at 20p, that were issued to Cyrus as part of the Cyrus Facility,
will be cancelled.
A general meeting of the Company ("GM") will be convened to approve, inter alia,
the Loan Notes, the Waiver (as defined below) and the proposed amendment to the
Company's articles of association. Further details of the Loan Notes will be set
out in the notice convening the GM.
Consolidation of Ordinary Shares
As part of the restructuring of the Company, the board of directors proposes to
consolidate the Ordinary Shares on the basis of one new ordinary share with a
par value of 10p for every ten existing ordinary shares with a par value of 1p
("Consolidation"). A resolution to approve the consolidation will be proposed at
the GM. If approved by shareholders at the GM, the consolidation will reduce the
number of issued shares in the capital of the Company but will not materially
affect the percentage shareholdings referred to in this announcement.
The City Code on Takeovers & Mergers (the Code")
At present, Cyrus does not have a shareholding in the Company.
If the issue of the Loan Notes is approved by shareholders, upon conversion in
full of the Loan Notes, FBC Sarl would hold 577,275,643 Ordinary Shares (before
consolidation), representing a maximum holding of 70.18% of the current issued
share capital of the Company. Under Rule 9 of the Code, any person or group of
persons acting in concert who acquires an interest (as defined in the Code) in
shares which, taken together with shares in which he is interested and in which
persons acting in concert are interested, carry 30 per cent. or more of the
voting rights of a company which is subject to the Code is normally required by
the Panel on Takeovers and Mergers (the "Panel") to make a general offer to
shareholders to acquire the balance of the shares not held by such person or
group of persons acting in concert.
The Company is, therefore, proposing to seek a waiver of the obligations that
would otherwise be placed on Cyrus, pursuant to Rule 9 of the Code, at the GM
(the "Waiver"). The issue of the Loan Notes is conditional upon the grant of the
Waiver and its approval by shareholders.
Shareholders should be aware that, if the Waiver was to be approved by
shareholders and the Loan Notes converted in full, FBC Sarl would hold more than
50% of the voting rights attaching to the Company's issued share capital.
Accordingly, FBC Sarl may be able to increase its aggregate interest in shares
without incurring any further obligation under Rule 9 of the Code to make a
general offer.
Conditions
The issue of the Loan Notes is conditional, inter alia, on the Company convening
the GM at which shareholders approve:
* the Waiver, agreed with the Panel for the purposes of Rule 9 of the Code, by
independent shareholders voting on a poll, of the obligations that would
otherwise arise as a result of the issue and conversion of the Loan Notes; and
* the amendment to the Company's articles of association.
Completion of the issue of the Loan Notes is also conditional on the Panel
granting the Waiver and the Panel approving the circular convening the GM.
Further Announcements
A further announcement will be made in due course when a circular to
shareholders to convene the GM is dispatched.
CEO Nicholas Hall commented -
"The refinancing of the Cyrus debt preserves the integrity of the Company at
this most critical time.
Cyrus has become our most important strategic partner and, thanks to its
support, we are now able to progress the acquisition and reopening of the
Nalunaq gold mine, continue the development of the Black Angel and create a
platform from which we can build a specialist mining business focused on
Greenland."
+----------------------------------------------------------+---------------------------+
| Enquiries: | |
| Angus & Ross | 07931 709 053 |
| plc | |
| Nicholas | 0207 936 5200 |
| Hall, Chief | 0161 832 2174 |
| Executive | |
| | 0207 562 3366 |
| Fox-Davies | |
| Capital | |
| (Broker) | |
| Jason | |
| Bahnsen | |
| WH Ireland | |
| Limited | |
| (Nominated | |
| Adviser) | |
| Adrian | |
| Kirk | |
| Bishopsgate | |
| Communications | |
| Limited | |
| Nick Rome | |
| | |
+----------------------------------------------------------+---------------------------+
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This information is provided by RNS
The company news service from the London Stock Exchange
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