African Potash secures $3.75m to support Lac Dinga

PUBLISHED: Aug 09 2014 @ 18:19 | Comments (3) |

Secures up to US$3,750,000 to support development of Lac Dinga Potash Project

African Potash (LSE:AFPO), the AIM listed exploration company focused on sub-Saharan potash assets, has announced that it has entered into a convertible securities issuance deed with Bergen Opportunity Fund, LP, an institutional investment fund managed by Bergen Asset Management, LLC, a New York asset management firm, in connection with an issuance by the Company of zero coupon convertible securities having a nominal amount of up to US$3,750,000.

Highlights:

· Investment of up to US$3,750,000 payable in four tranches, to provide working capital and support growth

· African Potash focussed on advancing its Lac Dinga Potash Project in the Republic of Congo – maiden drilling campaign underway

· Convertible security funding to be provided by New York based fund, Bergen Global Opportunity Fund, LP

· Staged funding potentially minimises dilution to existing shareholders

The Convertible Securities will (subject to the satisfaction of certain conditions) be issued in four tranches and the Company will make an announcement of the issue of each Convertible Security. The initial Convertible Security will have the nominal value of US$830,000 and will be issued shortly. Each of the three subsequent tranches of Convertible Securities will be issued 90 days after the date of issuance of the previous Convertible Security and have the nominal value of between US$500,000 and US$1,000,000.

The Convertible Securities will have a term ending on 7 February 2017.

African Potash will have the right to repurchase the Convertible Securities for cash at 105% of their nominal value (and without a fee or penalty) within a certain redemption period. The Company will additionally have the right to terminate the Agreement at any time and not to issue the remaining Convertible Securities on payment of a modest termination fee.

The Convertible Securities will (subject to the satisfaction of certain conditions) be convertible into ordinary shares of African Potash (the “Shares”), in whole or in part, at the option of Bergen. The Company will make an announcement each time any Convertible Securities are converted in whole or in part and will specify in such announcement the relevant conversion price, which will be the lower of (a) 91% of the average of five daily volume-weighted average prices of the Shares on AIM during a specified period preceding the relevant conversion and (b) 140% of the average of the daily volume-weighted average prices of the Shares for the 20 consecutive trading days preceding the date of execution of the Deed.

Bergen has agreed to certain limitations on its ability to dispose of the Shares following a conversion of the Convertible Securities. Additionally, Bergen has agreed to limitations on its ability to convert the Convertible Securities, including a limit on how much of the Convertible Securities can be converted in a particular time period. Further, the Investor does not, and has agreed not to, and to cause its affiliates not to, short-sell the Shares.

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