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
END
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