IMIC Intl Min&IN Crp

TIDMIMIC

RNS Number : 7843K

Intl Mining & Infrast Corp PLC

21 April 2015

21 April 2015

INTERNATIONAL MINING & INFRASTRUCTURE CORPORATION PLC

("IMIC" or the "Company")

Bond Restructuring Proposal - Afferro Mining Ltd.

International Mining & Infrastructure Corporation plc (AIM: IMIC), the Company focused on unlocking the value of iron ore in Africa, is pleased to announce that its 100 per cent. owned Canadian subsidiary, Afferro Mining Ltd., formerly Afferro Holdings Ltd., ("Afferro"), has invited the holders ("Bondholders") of its US$20 million 8.875 per cent. bond due to mature in 2016 (the Bond) to approve a proposal to modify certain terms and conditions constituting the Bond (the "Proposals"), in line with those announced on 17 April 2015 in connection with certain other outstanding bonds.

Key Proposals

-- To amend the final redemption date by extending it by 5 years from 30 October 2016 to 30 October 2021;

-- To amend the Interest rate by decreasing the coupon payable on the Bond by 3.875 per cent., from 8.875 per cent. to 5 per cent.;

-- To increase the repayment amount to be paid at final maturity to compensate for the reduction in interest rate, to 133.1278 per cent. of the nominal amount of the Bond;

-- By inserting a new accelerated repayment covenant which will oblige Afferro to make immediate repayment to the Bondholders if Ethelbert Cooper is removed from the office of director and Non-Executive Chairman of International Mining & Infrastructure Corporation plc, of which Afferro is a subsidiary, by a shareholder resolution; and

-- To amend the conditions relating to the interest payable date by making the payment of the interest from semi-annual to annual.

Ethelbert Cooper, IMIC's Chairman, commented:

"Following a review of our debt position, we have made certain proposals to the Bondholders in relation to restructuring of the Bond. The Bond Proposals have been designed to rebalance the group's financing obligations."

Background to the Proposals

The Bond

On 30 October 2013, the Afferro issued an initial tranche of the $60 million 8.875 per cent. Bond due 30 October 2016 (ISIN XS0 XS0942222653). The actual amount drawn down on the Bond was US$20,000,000. The interest payable on the Bond was at the rate of 8.875 per cent. The nominal value of each of the Bonds is $100,000, which is repayable on 30 October 2016. Afferro and certain of the Bondholders (as defined below) have held discussions regarding certain amendments to the Bonds.

Afferro announces that it is inviting Bondholders to consent to certain amendments to certain terms and conditions, to changes in the extension of the maturity date, interest payment date and conditions, repayment amount and accelerated repayment provisions relating to the 2016 Bond (described briefly in the table below) as proposed by Afferro.

Rationale for the Proposals

The considerable fall in international iron ore prices over the past 15 months has created a challenging environment for Afferro. As China experienced accelerated economic growth over the past decade, its consumption of the principal raw material used in steelmaking increased substantially, climbing to 70 per cent. of globally-traded iron ore, contributing to a significant rise in iron ore prices. However, the recent slowdown in demand for resources from China due to stabilisation of economic growth, as well as increasing global supply of the resource from the major producers, whose high-volume, low-cost iron ore production strategy is aimed at boosting market share and sustaining profit margins, have together had a negative impact on ore prices. These prices have declined very significantly since November 2013 putting adverse pressure on smaller, marginal producers, which have struggled to remain profitable in the current market environment.

The funding environment for junior iron ore developers is extremely difficult at this time due to the very low iron ore prices. In the circumstances, Afferro considers that it is prudent to restructure the debt obligations of Afferro both from the perspective of interest reduction and extending the term of the debt.

The Board of Afferro believes that it is unlikely that the Group will generate cash from its operations in the near term and the bond Proposals are therefore designed to rebalance the Group's financing obligations.

Accordingly, Afferro would like to change the maturity date and interest rate of the Bonds and to make payment of the interest annual.

The Board of Directors of Afferro has carefully considered the Proposals and believes that the Proposals described in the Consent Solicitation Memorandum, to be sent to Bondholders on 21 April 2015, provide the most appropriate solution to the funding challenges.

Afferro has confidentially discussed these amendments to the Bond with certain of the Bondholders and, based on the Bondholders' responses during those discussions, Afferro expects them to be supportive of the Proposals.

Quorum and Required Votes

The quorum required for the proposed amendments to be considered is one or more holders of the Bond or proxies representing 75 per cent. in principal amount of the Bond outstanding.

To be passed, the extraordinary resolution in respect of the Proposals requires a majority of not less than 75 per cent. of the votes cast. If passed, the extraordinary resolution shall be binding on all the Bondholders, and each of them shall be bound to give effect to it accordingly.

Expected Timeline

The following summary of key dates is qualified in its entirety by the more detailed information appearing in the consent solicitation memorandum. Bondholders should take note of the following dates in connection with the consent solicitation.

This timetable is subject to change and dates and times may be extended or changed by Afferro in accordance with the terms of the consent solicitation, as described in this consent solicitation memorandum. Accordingly, the actual timetable may differ significantly from the timetable below.

Event Date and Time

_________________________________________________________ __________________

   Announcement of consent solicitation and proposals                            20 April 2015 

Revocation deadline 10:00 a.m. (London time) on 1 May 2015

Latest time for Bondholders to deliver or procure delivery on their behalf

to the issuer of a valid instruction revoking previously submitted

consent instructions.

Voting deadline 10:00 a.m. (London time) on 5 May

2015

Deadline for Bondholders to deliver or procure delivery on their behalf

to the Issuer of a consent instruction in favour of the

extraordinary resolution.

Deadline for appointing a proxy in respect of the 2016 Bonds 5:00 p.m. (London time) on 1 May

2015

Announcement of the results of Bondholders extraordinary As soon as reasonably practicable

resolution after the voting has concluded and,

in any event, within 14 days of the

Voting Deadline.

The complete terms and conditions of the consent solicitation are described in the consent solicitation memorandum, copies of which may be obtained by contacting Sanjiv Radia, the information and tabulation agent for the consent solicitation, as set out below. Additional information concerning the consent solicitation may be obtained by contacting the paying agent.

This press release is for informational purposes only, and the consent solicitation is being made only pursuant to terms of the consent solicitation memorandum. The consent solicitation is not being made to, and consents are not being solicited from, holders of Bonds in any jurisdiction in which it is unlawful to make such solicitation or grant such consent. Neither the Company nor the paying agent makes any recommendation as to whether or not holders of Bonds should deliver any consents. Each Bondholder must make their own decision as to whether or not to deliver a consent.

Further Information

A complete description of the terms and conditions of the consent solicitation is set out in the consent solicitation memorandum. Further details about the transaction can be obtained from:

The Company

Sanjiv Radia

Tel: +44 (0) 20 7290 3340

Email: sanjiv.radia@imicplc.com

The Paying Agent

Deutsche Bank AG, London Branch

Paul Yetton

Tel: 020 7547 6657

Email: paul.yetton@db.com

For further information, please contact:

 
 International Mining & Infrastructure Corporation           www.imicplc.com 
  plc 
 Ethelbert Cooper, Chairman 
  Haresh Kanabar, Chief Financial Officer               +44 (0) 20 7290 3340 
 Strand Hanson Limited - Financial & Nominated        www.strandhanson.co.uk 
  Adviser                                               +44 (0) 20 7409 3494 
  James Spinney / Ritchie Balmer / James 
  Bellman 
 Pareto Securities Limited - Sole Broker                   www.paretosec.com 
  Guy Wilkes / Will Slack                               +44 (0) 20 7786 4370 
 Deutsche Bank AG - Paying Agent                        www.db.com+44 (0) 20 
  Paul Yetton                                                      7547 6657 
 Buchanan - Financial PR                                 www.buchanan.uk.com 
  Mark Court / Sophie Cowles                            +44 (0) 20 7466 5000 
 

About IMIC

IMIC's strategy is, in conjunction with its partner AIOG, working to develop fundable solutions to infrastructure provision for iron ore resources in West and Central Africa. In support IMIC will seek to acquire interests in iron ore projects that would benefit from a specific infrastructure solution. IMIC made its first investment with the Dec 2013 acquisition of Afferro Mining Inc, taking ownership of four iron ore deposits in Cameroon, the most advanced asset being Nkout. IMIC plans to continue to develop its assets, including accelerating the feasibility studies of the smaller Ntem deposit, which is located only 80km from Kribi deep water port.

IMIC's focus will initially be on iron ore opportunities in West and Central Africa. The demand for iron ore is currently being driven by China which consumes approximately 70 per cent. of the world's current annual production. As the urbanization of China continues demand for iron ore is expected to remain at significant levels through to 2030. The iron ore projects currently identified in West and Central Africa have the potential to produce at least 400 million tonnes of iron ore each year. This would establish Africa as a global player, alongside Australia and Brazil, in the iron ore industry.

In order to help deliver its infrastructure solutions, IMIC and AIOG have established strategic partnerships with various Chinese state owned companies. These companies are involved in railway and port construction, power, iron ore beneficiation and iron ore marketing. These relationships are intended to give IMIC and AIOG the ability to work with relevant governments and financial institutions to deliver infrastructure solutions and to guarantee the onward sale of iron ore in China and other emerging world markets.

IMIC shares are traded on the London Stock Exchange's AIM market under the ticker symbol IMIC.

About Afferro Mining Ltd.

On 19 December 2013 pursuant to an application for amalgamation (dated 18 December 2013) filed at the British Columbia court Afferro Holdings Ltd. (number BC0963907) was amalgamated with Afferro Mining Inc. (number BC0864969) and the amalgamated company adopted as its name, the name of Afferro Mining Inc. as confirmed by a Certificate of Amalgamation (number BC0988805) by the Registrar of Companies of the Province of British Columbia, Canada who certified that Afferro Holdings Ltd. (incorporation number BC0963907) and Afferro Mining Inc. (incorporation number BC0864969) were amalgamated as one company under the name Afferro Mining Inc. on 19 December 2013.

This information is provided by RNS

The company news service from the London Stock Exchange

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