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What are the details:
Highlights
· Proposed capital reorganisation: every 50 existing ordinary shares of 1 pence each to be consolidated into 1 consolidated share of 50.0 pence and each consolidated share will then be sub-divided into 1 new ordinary share of 1 pence and 1 new deferred share of 49 pence;
· Convertible loan note to raise US$1.65 million (approximately £1.06 million). Conversion at an effective price of 0.56 pence per existing ordinary share (28.18 pence per New Ordinary Share);
· Issue of warrants with aggregate exercise price of US$1.65 million. Effective exercise price of 0.35 per existing ordinary share (17.61 pence per New Ordinary Share);
· Subscription to raise £497k at an effective price per existing ordinary share of 0.131 pence (6.55 pence per New Ordinary Share);
· Use of Proceeds to enable Stellar to apply for the Tongo mining licence, resume trial mining at Baoulé and for general working capital needs.
Stellar Diamonds plc, the London listed (LSE:STEL) diamond development company focused on West Africa, has announced that it has entered into a conditional convertible loan agreement with Deutsche Balaton AG to raise US$1.65 million (approximately £1.06 million) by way of the issue of new convertible loan notes. Additionally the Company has granted Deutsche Balaton warrants to subscribe for new ordinary shares for an aggregate subscription price of US$1.65 million (approximately £1.06 million).
The Company has also entered into conditional agreements to raise approximately £497,452 by way of a subscription through the issue of 7,594,692 New Ordinary Shares (being those ordinary shares in issue following the capital reorganisation, details of which are set out below) in aggregate at 6.55 pence per New Ordinary Share.
As part of the Subscription, the Company has entered into a conditional subscription agreement with Deutsche Balaton, which has agreed, pursuant to the terms of the Subscription, to subscribe for 6,912,692 Subscription Shares at the Subscription Price. Following completion of the Subscription, Deutsche Balaton will be interested in 29.00 per cent. of the so enlarged issued share capital of the Company.
The weighted average price of the New CLN conversion price, New Warrant exercise price and Subscription Price in respect of Deutsche Balaton’s investment in Stellar is approximately 0.31 pence per Existing Ordinary Share for a total investment of US$4 million or approximately £2.6 million, should the New Warrant be exercised in full. The New Warrants are exercisable following conversion or repayment of the New CLN.
Subject to completion of the New CLNs, it intended that the initial convertible loan notes for US$0.33 million granted to Deutsche Balaton and the initial warrants granted to Deutsche Balaton, as announced on 14 August 2015, be cancelled and be replaced by the New CLNs and the New Warrants respectively.
Subject to completion of the New CLNs, the proceeds intended to be received from the issue of the New CLNs would be approximately US$1.2 million (approximately £0.77 million), being US$1.65 million less US$0.33 million already received by the Company pursuant to the Initial CLN less corporate finance and legal expenses in connection with the New CLNs.
The net proceeds of the CLN and the net proceeds of the Subscription of approximately £1.26 million in aggregate will be used to provide ongoing working capital for the Group as it seeks to complete the Tongo mining licence application and resume the trial mining of the diamondiferous Baoulé kimberlite pipe which has to date yielded over 6,400 carats with two diamond sales being completed realising over US$700,000. The application for the Tongo mining licence will be formally submitted in the near future and the approval process is anticipated to be completed later in 2015 or in early 2016 (although there is no guarantee in respect of the timing of receipt of the mining licence application or its approval).
The terms of the New CLNs are such that Deutsche Balaton may elect for the New CLNs to be converted into up to 3,747,368 New Ordinary Shares in the Company at a conversion price of 44.03 cents (approximately 28.18 pence based on the current exchange rate) per New Ordinary Share (for illustrative purposes only, this is equivalent to a price of approximately 0.56 pence per existing ordinary shares prior to the proposed capital reorganisation). However, this is subject to Deutsche Balaton having a maximum interest in the enlarged share capital of the Company of 37.5 per cent. Alternatively Deutsche Balaton may elect to become a joint venture partner and convert the New CLN into shares in one or more of the Group’s projects. They may also elect for a combination of PLC Conversion and a Subsidiary Conversion.
Similarly, upon exercise of the New Warrants, Deutsche Balaton may elect to subscribe for up to 5,995,789 New Ordinary Shares, subject to Deutsche Balaton having a maximum interest in the New Ordinary Share Capital of 37.5 per cent. A PLC Exercise would be at an exercise price of 27.52 cents (approximately 17.61 pence based on the current exchange rate) per New Ordinary Share (for illustrative purposes only, this is equivalent to a price of approximately 0.35 pence per existing ordinary share prior to the capital reorganisation). Alternatively Deutsche Balaton may elect to subscribe for shares in one of the Group’s subsidiaries or elect for a combination of both PLC Exercise and Subsidiary Exercise.
