TIDMBHR
RNS Number : 0935Z
Beacon Hill Resources plc
08 December 2014
8 December 2014
Beacon Hill Resources Plc / AIM: BHR / Sector: Mining
Beacon Hill Resources Plc
("Beacon Hill" or the "Company")
Restructuring Update, Proposed Open Offer and Shareholder
Conference Call
Beacon Hill, the coking coal developer focused on the Minas
Moatize Coking Coal Mine in Tete, Mozambique, announces an update
in respect of its proposed restructuring and its intention to
launch an open offer in early 2015, which will give priority to
existing private and/or smaller shareholders.
Highlights:
-- Proposed up to EUR5 million open offer intended to be
launched in early 2015, post the forthcoming General Meeting,
focused on minimising the dilutive impact of the restructuring on
existing shareholders
-- Planned open offer to be made to shareholders at the same
price as the envisaged US$14.5 million institutional fundraising in
early 2015 and to include loyalty warrants
-- Shareholders participating in the open offer to receive 1
loyalty warrant for every 3 shares subscribed in the open offer,
recognising the support of existing private and/or smaller
shareholders in the restructuring
-- An understanding has been reached with Vitol Coal S.A.
whereby an agreement is expected to be shortly entered into to
postpone repayment of US$4.1 million to 31 March 2015, subject to
shareholders approving all resolutions at the General Meeting to be
held on Wednesday 17 December 2014
-- The Chairman, CEO and CFO of Beacon Hill will host a
conference call for investors at 10.30 a.m. UK time on Tuesday 9
December 2014 to answer any queries regarding the restructuring
Proposals
Justin Farr-Jones, Chairman of Beacon Hill, commented:
"I have been in constructive dialogue with our debt holders and
a number of our private and smaller shareholders about the fairest
method for such shareholders to participate positively in the
recapitalisation and restructuring of the Company. Accordingly, the
intended open offer is being structured to ensure that existing
smaller shareholders are prioritised in order to maximise the
opportunity for them to maintain a meaningful level of investment,
mitigate dilution and participate at the same price as the
envisaged US$14.5 million institutional fundraising in early 2015.
In addition, the Board intends to include a loyalty warrant package
in conjunction with the open offer to further recognise the support
of the Company's existing shareholders.
"I am convinced that the inclusion of an open offer prioritising
existing smaller shareholders together with a loyalty warrant
package, alongside Vitol's repayment extension, ensures that we now
have a comprehensive plan in place to address our existing
shareholders' concerns, recapitalise the group's balance sheet, and
maintain the Company's status as a going concern, whilst we seek
final credit approval and satisfaction of the remaining conditions
precedent for the new debt facility from the DFI.
"Subject to passing all resolutions at the forthcoming General
Meeting, the Board will proceed immediately with its preparations
for launching an open offer to shareholders in early 2015,
alongside the envisaged US$14.5 million institutional fundraising,
which is a key condition precedent for the new US$20 million debt
facility from the DFI.
"Once the US$14.5 million fundraising has been successfully
completed and the new DFI debt facility secured, we will be well
positioned to rapidly develop Minas Moatize into a profitable, Tier
1 cash cost coking coal producer."
Proposed Open Offer to Shareholders
Further to the Company's announcement of 1 December 2014 (the
"Announcement"), the Board has consulted with a number of the
Company's smaller and private shareholders and, assuming that all
of the proposed resolutions are passed by shareholders at the
forthcoming General Meeting, it is the Board's intention to make an
open offer of new ordinary shares in the Company to raise up to
EUR5 million at the same price as the envisaged US$14.5 million
institutional fundraise in early 2015. The planned open offer would
be made available to all qualifying shareholders on the Company's
register, following the capital reorganisation to be approved at
the General Meeting, on a record date to be determined and
announced at the appropriate time early in 2015. In order to
maximise the new shares available for private and/or smaller
shareholders under such an open offer, the Board has received
assurances from the Company's largest institutional shareholder
that it would not take up any of its open offer entitlements,
thereby affording the Company's other shareholders (particularly
private and/or smaller investors) the opportunity to secure
additional open offer shares and increase their shareholding
positions in the Company under an envisaged excess application
facility. The Board believes that implementing an open offer is
only appropriate following completion of the initial capital
restructuring Proposals, and in conjunction with the envisaged
larger fundraise in early 2015, to ensure that the Company is in a
more stable and sustainable financial position. In addition, the
Board intends to include a loyalty warrant package with the open
offer to further recognise the valuable support of the Company's
existing shareholders. The Board's current intention is to grant 1
loyalty warrant for every 3 shares subscribed to in the open offer
by shareholders.
Completion of the proposed open offer and envisaged
institutional fundraising would both be subject to the passing of
the necessary resolutions by shareholders of the Company at a
future general meeting of the Company.
Vitol Amendment Agreement
The Company is also pleased to announce that it has reached an
understanding with Vitol Coal S.A. ("Vitol") to enter into a
further amendment agreement shortly whereby, subject to the passing
of all resolutions at the forthcoming General Meeting, it has
agreed to extend the payment date of the US$4.1 million, which is
currently due for repayment on 30 January 2015 under its existing
US$10 million senior debt facility, to 31 March 2015. In return,
the Company has agreed to pay Vitol a US$60,000 amendment fee (to
be added to the capitalised outstanding loan balance) and to
appoint an appropriate restructuring expert to advise the Board.
This conditional extension by Vitol is a key condition precedent to
completion of the Company's proposed up to GBP1.5 million
fundraising to provide urgently required working capital prior to
the year end. The Board, as previously announced, remains in
discussions with Vitol to restructure its existing US$10 million
senior debt facility which includes the possibility of Vitol
converting such outstanding indebtedness into equity prior to 31
March 2015, simultaneous with the abovementioned envisaged US$14.5
million institutional fundraising, proposed open offer and new
US$20 million debt facility from the DFI.
As set out in the Announcement, the Independent Directors
consider the financing and restructuring Proposals to be in the
best interests of the Company and its Shareholders as a whole and
accordingly recommend that Shareholders vote in favour of all of
the proposed resolutions at the General Meeting to be held on 17
December 2014 (further details of which are set out in the
Announcement). The Independent Directors remain strongly of the
view that it is highly likely that the Company would be forced into
administration if all of the proposed resolutions are not duly
passed.
Capitalised terms used but not defined above have the same
meanings as set out in the Announcement.
Shareholder Conference Call
Beacon Hill will host a conference call for shareholders at
10.30 a.m. UK time on Tuesday 9 December 2014 to answer queries
regarding the Financing and Restructuring Update announced on 1
December 2014.
To participate in this conference call, please dial 0808 109
0700, or +44 (0) 20 3003 2666 if you are calling from outside of
the UK, and quote the password "Beacon Hill" to the operator.
Please note that all lines will be muted with the exception of
Beacon Hill's management, however the Company invites shareholders
to submit questions to St Brides, the Company's public relations
advisers, ahead of the call via email to info@sbmf.co.uk. The
management team will strive to answer as many questions as possible
during the course of the call.
If you have any problems accessing the call, please contact St
Brides Media & Finance on info@sbmf.co.uk or telephone number
+44 (0) 20 7236 1177.
**ENDS**
For further information, please contact:
Beacon Hill Resources Plc
Justin Farr-Jones, Chairman (jfarr-jones@bhrplc.com)
Rowan Karstel, Chief Executive Officer
(rowan.karstel@bhrplc.com)
Strand Hanson Limited (Nominated
Adviser and Broker)
James Harris / Matthew Chandler / +44 20 7409
Ritchie Balmer 3494
St Brides Media & Finance Limited
(Financial Public Relations)
Susie Geliher / Elisabeth Cowell +44 20 7236
(info@sbmf.co.uk) 1177
This information is provided by RNS
The company news service from the London Stock Exchange
END
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