KMR Kenmare Resources Plc

RNS Number:8990Z
Kenmare Resources PLC
18 June 2004

18 June 2004

               Kenmare Resources plc ("Kenmare" or "the Company")

                        PLACING AND OPEN OFFER TO RAISE

                      UP TO US$97 MILLION (STG#53 MILLION)

       FURTHER SIGNIFICANT STEP TAKEN TOWARD MOMA PROJECT IMPLEMENTATION

Kenmare is pleased to announce that the Company has arranged an equity funding,
comprising a Placing of US$55 million (Stg#30 million), which covers Kenmare's
equity requirement of US$49 million for the Moma Titanium Mineral Sands Project
plus expenses. Kenmare is also pleased to announce an Open Offer, on the same
terms, of up to US$42 million (Stg#23 million), which would cover a US$30
million contingency fund which is required for the overall Project financing.
The completion of the equity funding will represent the last major step in the
financing of project implementation at the Moma Titanium Mineral Sands Project
in Mozambique.

As detailed below, significant progress has also been made in finalising debt
funding for the Project and Kenmare and the lenders to the Project expect to
sign loan agreements covering US$269 million of project debt in Iveagh House in
Dublin this afternoon.

Placing and Open Offer

Kenmare has, with its brokers, Canaccord Capital (Europe) Limited ("Canaccord")
and J&E Davy ("Davy"), undertaken a placing for a total of 187,500,000 new
Ordinary Shares in the capital of the Company at a price of Stg16p per share, to
raise in aggregate Stg#30 million, before expenses (the "Placing").

The Company is also implementing an open offer of in aggregate 143,968,222 new
Ordinary Shares to existing Shareholders on the basis of 13 new Ordinary Share
for every 27 existing Ordinary Shares held at the close of business on 16 June,
2004 to raise up to Stg#23 million (the "Open Offer"). The Placing and Open
Offer are subject to a number of conditions, summary details of which are set
out below.

It is also intended that new warrants to subscribe for Ordinary Shares will be
issued to subscribers under the Placing or Open Offer on the basis of 1 such
warrant ("New Warrant") for every 4 new Ordinary Shares subscribed for. Each New
Warrant will carry an entitlement, on exercise at a price of Stg19p, to 1 new
Ordinary Share and will be exercisable from the date of issue up to 23 July,
2009. It is intended that the New Warrants will be admitted to the Official
Lists of the Irish Stock Exchange and the UK Listing Authority and to dealing on
the Irish Stock Exchange and the London Stock Exchange's main market for listed
securities.

The Open Offer is not underwritten but, to the extent that the combined proceeds
of the Placing and the Open Offer are less than Stg#53 million (or such lesser
amount as may be necessary to satisfy the relevant condition precedent for
drawdown on the Project loans), Canaccord has committed to use its best
endeavours to procure subscribers in order to meet the targeted funds, whether
for Ordinary Shares not taken up under the Open Offer, additional Ordinary
Shares or by way of another instrument such as a convertible loan note
("Supplemental Placing").

When completed, the Placing and Open Offer, and if necessary, a Supplemental
Placing, will provide the Group with the complete equity component, totalling
US$79 million net of expenses, of Project Financing for its Moma Project in
Mozambique. Board approvals of loans have been procured from all of the members
of a group of lenders which includes The African Development Bank, the European
Investment Bank, ABSA, a South African commercial bank, FMO, a Dutch development
finance institution, and KfW Bankengruppe, a German development finance
institution, for the debt component of Project Financing. The formal loan
agreements for the debt package, totalling up to US$269 million in a combination
of senior and subordinated debt, are expected to be signed this afternoon ("Loan
Agreements").

As previously announced, the EPC Contract for the construction and commissioning
of the mine at Moma has also been signed and sales agreements have been entered
into in respect of sufficient Mine product to satisfy the related condition to
loan disbursement. All governmental and environmental licences and other
approvals necessary to commence the development of the Mine are also now in
place.

Commenting on the Placing and Open Offer proposals, Mr. Charles Carvill,
Chairman stated:

"With the Placing and Open Offer, Kenmare is putting in place the last
significant pre-condition to project implementation at Moma. The support
afforded by the participants in the Placing, primarily UK and Irish
institutional investors, is a key validation of Kenmare's strategy for Moma.
Assuming that all of the conditions of Project Financing are satisfied, and work
under the EPC Contract is conducted on schedule by the EPC Contractor, the mine
will be operational during the second half of 2006."

Conditions of the Placing and Open Offer

The completion of the Placing and Open Offer is conditional, inter alia, on
shareholder approval of the relevant resolutions being received at an
Extraordinary General Meeting, the Loan Agreements having been entered into, and
not less than Stg#53 million (or such lesser amount, net of expenses, as may be
necessary to satisfy the relevant condition precedent for drawdown of the
Project loans) being raised under the Placing and Open Offer (and if necessary a
Supplemental Placing).

The Placing and Open Offer will also each be conditional on the approval,
subject to allotment, by the Irish Stock Exchange and the UK Listing Authority
of application for admission of the New Ordinary Shares and New Warrants to be
issued pursuant thereto to their respective Official Lists and on the Irish
Stock Exchange and the London Stock Exchange admitting such New Ordinary Shares
and New Warrants to trading on their respective main markets for listed
securities. The long stop date for satisfaction of these conditions is 30
September, 2004.

Implications of Signing the Loan Agreements

If the Loan Agreements are signed, then certain fees due to the Lenders and
certain fees due to advisers would become payable, which fees are of the order
of in aggregate Stg#5.4 million (US$9.8 million). . Existing cash reserves of
the Group would be insufficient to cover these amounts. In the event that the
Placing and Open Offer does not complete by the respective expected dates of mid
to end July, 2004 (such delay being likely to arise (assuming the prior approval
by Shareholders of the Resolutions) only in the circumstances where a
Supplemental Placing is required and is not completed by the expected date in
mid July, 2004), the Group will have an immediate working capital shortfall and
will be required, as a matter of urgency to take certain remedial actions to
address its financial position pending subsequent completion of the Placing and
Open Offer (which must in any event, in accordance with its conditions, occur by
30 September, 2004). Such actions, which would be implemented by the Group as
soon as it becomes aware of the likelihood of any delay, would include limiting
discretionary expenditure and negotiating the timing and method of payments to
creditors, including the Lenders and advisers. The Directors are confident that
the Lender and adviser fees would, where required, be deferred. Notwithstanding
the working capital implications of signing the Loan Agreements, the Directors
are of the view that such signature is a necessary and appropriate step in order
to advance project implementation.

Shareholder Documentation

Shareholder documentation relating to the proposed Placing and Open Offer,
containing inter alia detailed information on the Moma Project, and on the
procedure and timetable for application under the Open Offer, and convening the
requisite Extraordinary General Meeting, is expected to be posted to
Shareholders on Monday, 21 June, 2004.



Kenmare Resources plc
Michael Carvill                                     Tony McCluskey
Managing Director                                   Finance Director
Tel: +353-1-671 0411 or +353-87-674 0110            Tel: +353-1-671 0411 or +353-87-674 0346

Murray Consultants                                  Conduit PR Ltd
Tom Byrne                                           Leesa Peters
Tel: +353 (1) 498 0300 or +353 (86) 810 4224        Tel: + 44 207 936 9095 Mob: + 44 (0)781 215 9885

                            www.kenmareresources.com


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

IOEQKOKKBBKBCAD

Kenmare Resources (LSE:KMR)
Historical Stock Chart
From Jun 2024 to Jul 2024

Kenmare Resources (LSE:KMR)
Historical Stock Chart
From Jul 2023 to Jul 2024