Atalaya Mining PLC Astor Management AG case update (6172Y)
06 March 2017 - 10:46PM
UK Regulatory
TIDMATYM
RNS Number : 6172Y
Atalaya Mining PLC
06 March 2017
Atalaya Mining plc ("Atalaya" or the "Company")
Astor Management AG ("Astor") case ("Astor Case") update
Further to the announcement of the Company on 3 February 2017,
the Company announces that judgment was handed down in the Astor
Case in the High Court of Justice earlier on today.
In summary, the High Court found that:
-- The deferred consideration ("Deferred Consideration"),
payable to Astor under the master agreement entered into in 2008
between inter alia the Company and Astor ("Master Agreement"), did
not start to become payable when permit approval was granted for
the Rio Tinto Copper Project ("Proyecto Riotinto"). In addition,
the intra-group loans by which funding for the restart of mining
operations was made available to the Company's subsidiary, Atalaya
Riotinto Minera S.L. did not constitute a "Senior Debt Facility" so
as to trigger payment of the Deferred Consideration. Accordingly,
the first instalment of the Deferred Consideration has not fallen
due.
-- Astor failed to show that there had been a breach of the all
reasonable endeavours obligation contained in the Master Agreement
to obtain a senior debt facility or that the Company had acted in
bad faith in not obtaining a senior debt facility.
-- While the Company is not in breach of any of its obligations,
the Master Agreement and its provisions remain in place.
Accordingly, other than up to US$10 million a year which may be
required for non-Proyecto Riotinto related expenses, Atalaya
Riotinto Minera S.L. cannot make any distribution or any repayment
of the money lent to it by its holding company and must apply any
excess cash to pay the Deferred Consideration, until this has been
paid in full.
As a consequence, the judgment requires that in accordance with
the Master Agreement any excess cash (after payment of operating
expenses, sustaining capital expenditure, any senior debt service
requirements and up to US$10 million (for non-Proyecto Riotinto
related expenses)) should be used to pay the Deferred
Consideration. The amounts comprising the Deferred Consideration
are as fully set out in the Company's announcement of 2 November
2015 when it was first notified of the claim.
Alberto Lavandeira, CEO, commented:
"The Company welcomes the High Court's decision that it has
acted in accordance with the Master Agreement and that it is not in
breach of its obligations as no instalments of the Deferred
Consideration have yet fallen due. The High Court's decision also
sets out that in the absence of a Senior Debt Facility, the
Deferred Consideration is only payable out of excess cash generated
by Proyecto Riotinto. The Board believes this has removed a
significant uncertainty as it removed the threat of having to pay
the Deferred Consideration as a lump sum or according to a fixed
schedule, regardless of the cash generation of Proyecto Riotinto.
The Company will however consider whether it is appropriate to
appeal the Court's decision that excess cash should be used in this
way and will update the market accordingly."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
Contacts:
Atalaya Mining Roger Davey / Alberto +34 959
plc Lavandeira 59 28 50
--------------------- --------------------------- ------------
Canaccord Genuity
(NOMAD and Joint Henry Fitzgerald-O'Connor +44 20 7523
Broker) / Martin Davison 8000
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BMO Capital Markets Jeffrey Couch/Neil +44 20 7236
(Joint Broker) Haycock/Tom Rider 1010
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This information is provided by RNS
The company news service from the London Stock Exchange
END
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