Shanta Gold Limited Partial buyback & rollover of loan notes (3402R)
June 14 2018 - 1:00AM
UK Regulatory
TIDMSHG
RNS Number : 3402R
Shanta Gold Limited
14 June 2018
14 June 2018
Shanta Gold Limited
("Shanta Gold", "Shanta" or the "Company")
Partial buyback and rollover of convertible loan notes
Shanta Gold (AIM: SHG), the East Africa-focused gold producer,
is pleased to announce that it has received irrevocable
undertakings from holders of the Company's outstanding unsecured
subordinated convertible loan notes due April 2019 (the "Loan
Notes") (the "Loan Note Holders") representing 76% by nominal
value, to vote in favour of a buyback of approximately 33.33% of
the Loans Notes currently held by third parties (US$5 million,
leaving US$10 million held by third parties), and a 1-year
extension to the maturity date of the Loan Notes (the
"Arrangements").
Highlights
-- US$5 million of Loan Notes to be bought back in April 2019 at
their original maturity date, with the maturity of the Loan Notes
(US$10m million held by third parties) extended to April 2020;
-- 76% of Loan Note Holders provided irrevocable undertakings in
favour of the Arrangements;
-- The restructuring significantly increases Shanta's financial
flexibility at a time when the Company is pursuing exciting growth
options at NLGM, including the development of Ilunga and near mine
exploration; and,
-- Arrangements expected to be effective before the end of June
2018.
The Arrangements with Loan Note Holders
Shanta is intending to repurchase 33.33% of the Loan Notes
currently held by third parties, at par, through a subsidiary of
the Company (Shamba Limited), and to extend the maturity of the
Loan Notes to April 2020. The Arrangements are subject to the
approval of Loan Note Holders holding not less than 75% in nominal
value of the Loan Notes outstanding and irrevocable undertakings
have been received from 76% of Loan Note Holders to vote in favour
of the Arrangements. A written resolution will be sent to the Loan
Note Holders today which, if passed by the requisite majority, will
enable the Company to implement the Arrangements.
The Company is in a period of rapid deleveraging, and is on
course to repay US$30 million of gross debt to its lenders over the
next 18 months, including this US$5 million buy back of Loan Notes.
The Board therefore consider it prudent to take this opportunity to
reduce the cash call in April 2019 and extend the maturity of the
Loan Notes to April 2020.
The Arrangements will provide the Company with increased
flexibility to develop Ilunga, conduct exploration at NLGM and to
identify targets close to the mine. The Board considers the
Arrangements a positive outcome, resulting in reduced overall
indebtedness of the Company, with no associated fees.
A further announcement will be made in due course, upon the
passing of the written resolution.
Eric Zurrin, Chief Executive Officer, commented:
"This arrangement significantly increases our financial
flexibility and smooths our debt repayments. While we no longer
consider ourselves to be a highly geared company, we remain fully
focused on a complete deleveraging of the balance sheet while
executing growth options at the low cost NLGM mine."
Enquiries:
Shanta Gold Limited
+ 255 (0) 22 292
Eric Zurrin (CEO) 5148
Luke Leslie (CFO)
Nominated Adviser and Broker
Numis Securities Limited
+ 44 (0) 20 7260
Paul Gillam / John Prior / James Black 1000
Financial Public Relations
Tavistock
+ 44 (0) 20 7920
Charles Vivian / Barnaby Hayward 3150
About Shanta Gold
Shanta Gold is an East Africa-focused gold producer. It
currently has defined ore resources on the New Luika and Singida
projects in Tanzania and holds exploration licenses covering
approximately 1,500km(2) in the country. Shanta's flagship asset
New Luika Gold Mine commenced production in 2012 and produced
79,585 ounces in 2017. The Company has been admitted to trading on
London's AIM and has approximately 778 m shares in issue. For
further information please visit: www.shantagold.com.
This announcement is inside information for the purposes of
Article 7 of Regulation 596/2014.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
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contact rns@lseg.com or visit www.rns.com.
END
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