Beacon Hill Resources plc Appointment of Administrators (9498B)

TIDMBHR

RNS Number : 9498B

Beacon Hill Resources plc

12 January 2015

 
 12 January 2015

Beacon Hill Resources Plc / AIM: BHR / Sector: Mining

Beacon Hill Resources Plc

("Beacon Hill" or the "Company")

Appointment of Administrators

Beacon Hill, the coking coal developer focussed on the Minas Moatize Coking Coal Mine in Tete, Mozambique (the "Minas Moatize Mine"), announces that, further to its announcement of 17 December 2014, the board of directors of the Company (the "Board") has been unable to secure any viable alternative funding for the Company and it is now in default in respect of interest payments due to certain holders of the group's outstanding convertible loan notes.

Accordingly, further to independent advice received from the Company's appointed insolvency practitioner and discussions with its senior secured debt provider, Vitol Coal S.A. ("Vitol"), the Board has decided that the Company is no longer able to trade such that it must now place Beacon Hill Resources Plc and its wholly owned subsidiary, BHR Mining Limited, into administration. A formal notice of the appointment of Graham Bushby and Phillip Sykes of Baker Tilly Restructuring and Recovery LLP, 25 Farringdon Street, London EC4A 4AB as joint administrators of the Company and its abovementioned subsidiary (the "Administrators") has therefore been duly filed at Court and their appointment is effective immediately.

Vitol's senior debt facility is secured over the Minas Moatize Mine which is held by the Company's principal wholly owned operating subsidiary in Mozambique, Minas Moatize Limitada ("MML"). At this stage, MML has not been placed into administration as the Board and senior management will now seek to work with the Administrators and Vitol to maintain the Minas Moatize Mine as a going concern and identify potential acquirers. There can be no guarantee that MML and/or the Minas Moatize Mine can be sold as a going concern or at all.

Accordingly, pending the outcome of the abovementioned administration process and resolution and clarification of the group's financial position, the Company's ordinary shares will remain suspended from trading on AIM until further notice. Regrettably, in light of, inter alia, the Company's significant liabilities and prevailing adverse global coal market conditions, the Board does not currently anticipate that the Company's shareholders will receive any proceeds in relation to their ordinary shares from the administration process.

Following the appointment of the Administrators, Strand Hanson Limited has today resigned as Nominated Adviser and Broker to the Company with immediate effect. In the event that an alternative Nominated Adviser is not appointed within one month from today, then, in accordance with Rule 1 of the AIM Rules for Companies, the admission of the Company's ordinary shares to trading on AIM will be cancelled. It is unlikely that the Administrators will seek to appoint a new Nominated Adviser in respect of the Company.

A further announcement will be made in due course, as appropriate.

Justin Farr-Jones, Chairman of Beacon Hill, commented:

"Since 17 December 2014, the Board has endeavoured to identify and progress potential alternative funding and restructuring solutions with its senior debt provider and other key stakeholders to take the business forward. However, as indicated in the Company's announcement and circular of 1 December 2014 detailing the recommended conditional restructuring and funding proposals, it has unfortunately not proved feasible to secure any viable alternative sources of funding in the time available.

"Furthermore, due to the lack of sufficient shareholder support for the restructuring and funding resolutions proposed at the general meeting held on 17 December 2014, the Board and potential interested third parties were of the opinion that any alternative funding strategy proposed to the Company's shareholders would in all likelihood similarly fail to secure the requisite 75 per cent. threshold to enable its implementation. In light of, inter alia, the urgent requirement for additional working capital and default in respect of interest payments due to certain holders of the group's outstanding convertible loan notes, regrettably the only course of action for the Board is to place the Company and BHR Mining Limited into administration.

"Minas Moatize remains an excellent project with significant milestones achieved since the Company assumed management control of the mine in May 2010. We sincerely hope that a suitable acquirer will be found to enable this attractive asset to recommence economic mining operations over the longer term."

**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) 
 Baker Tilly Restructuring and Recovery 
  LLP                                                      +44 20 3201 
  Graham Bushby / Phillip Sykes                                   8000 
 St Brides Media & Finance Limited 
  (Financial Public Relations)                             +44 20 7236 
  Susie Geliher / Elisabeth Cowell                                1177

This information is provided by RNS

The company news service from the London Stock Exchange

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