TIDMCGH
RNS Number : 1720K
Chaarat Gold Holdings Ltd
30 December 2020
30 December 2020
Chaarat Gold Holdings Limited - (AIM:CGH)
("Chaarat" or the "Company")
Refinancing of Balance of Investor Loan
Chaarat (AIM:CGH), the AIM-quoted gold mining company with
assets in the Kyrgyz Republic and Armenia is pleased to announce
that it has entered into an agreement to refinance the outstanding
US$7 million principal of the investor loan originally made in
November 2018 (the "Investor Loan") together with interest accrued
of US$0.2 million (altogether, the "Refinancing").
Background to the Transaction
As announced on 6 October 2020, the Company refinanced US$13.5
million of the Investor Loan with Labro Investments Limited
("Labro") (the "Labro Term Loan"). The outstanding balance of US$7
million of the Investor Loan (the "Outstanding Investor Loan") had
a maturity date of 8 January 2021 but Chaarat had the option to
extend the maturity date to 31 December 2021 upon the following
terms:
-- interest rate to increase from 13% to 14%;
-- principal repayment to increase from US$7.0 million
to US$7.5 million; and
-- a fee payable of US$250,000.
The Refinancing
The Company and Labro have entered into an amendment to the
agreement relating to the Labro Term Loan whereby the amount of the
Labro Term Loan will be increased so as to enable the Company to
repay the Outstanding Investor Loan (together with accrued
interest). The terms of the increased Labro Term Loan are the same
as those applicable to the existing Labro Term Loan which are the
following:
-- an interest rate of 9.5%;
-- maturity date of 31 December 2024; and
-- the ability, at Chaarat's option, to prepay the Labro
Term Loan at any time without penalty.
Labro has also agreed not to take the full security package that
it would otherwise have been entitled to take upon repayment of the
Investor Loan. Labro will therefore not be taking a pledge over
shares in Chaarat Gold International Limited which owns the Kapan
mine operating subsidiary.
As consideration for refinancing the Outstanding Investor Loan
(together with accrued interest) and extending its maturity, the
Company has agreed that the principal amount of the Labro Term Loan
will increase by US$1.0 million which is comparable to the
compensation that would have been paid to the provider of the
Investor Loan had Chaarat exercised its option to extend the
maturity date of that loan beyond 8 January 2021 to 31 December
2021.
Labro has also agreed that the interest accrued on the Labro
Term Loan since 5 October 2020 amounting to US$0.3 million will be
added to the principal amount of the Labro Term Loan.
Therefore, the total principal amount of the Labro Term Loan
upon completion of the Refinancing will be US$22.0 million.
The board believes that consolidation of the Investor Loan with
the Labro Term Loan to create one single lower cost and longer
duration loan with its largest shareholder is in the best interests
of the Company.
Extension of maturity of amounts currently drawn under Labro
working capital facility
As announced on 15 April 2020, Labro extended to 31 December
2020 the working capital facility that it had made available to the
Company on 14 December 2018 (the "Labro Working Capital Facility").
There is currently US$0.8 million drawn under the Labro Working
Capital Facility. Labro has agreed that the date for repayment of
the amount drawn together with accrued interest will be extended to
30 June 2021. As the Labro Working Capital Facility expires on 31
December 2020, no further drawdowns are permissible under the Labro
Working Capital Facility.
Related Party Transaction
The arrangements with Labro in relation to the Refinancing as
well as the extension of the maturity of the amounts currently
drawn under the Labro Working Capital Facility constitute related
party transactions under AIM Rule 13 of the AIM Rules for Companies
as Labro is a substantial shareholder of the Company and Martin
Andersson (the executive chairman of Chaarat) is indirectly
beneficially interested in the majority of the shares in Labro. The
independent directors of the Company for the purposes of this
transaction (being all of the Company's Directors save Martin
Andersson) consider, having consulted with the Company's nominated
adviser, that the terms of the transaction are fair and reasonable
insofar as the Company's shareholders are concerned.
Artem Volynets, Chief Executive Officer of Chaarat, said:
"We appreciate the continued strong support from our largest
shareholder, Labro. The refinancing on more favourable terms and
the four-year extension of the maturity of the balance of the
Investor Loan affords the Company greater flexibility in terms of
the timing of repayment of this financing. We will continue to
evaluate all financing options in order to optimise the Company's
capital structure and reduce its overall cost of capital."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
+44 (0)20 7499
Chaarat Gold Holdings Limited 2612
Artem Volynets (CEO) info@chaarat.com
Canaccord Genuity Limited (NOMAD + 44 (0)20
and Joint Broker) 7523 8000
Henry Fitzgerald-O'Connor
James Asensio
+44 (0)20 7220
finnCap Limited (Joint Broker) 0500
Christopher Raggett
SP Angel Corporate Finance LLP (Joint +44 (0)20 3470
Broker) 0470
Ewan Leggat
About Chaarat
Chaarat is a gold mining company which owns the Kapan operating
mine in Armenia as well as Tulkubash and Kyzyltash Gold Projects in
the Kyrgyz Republic. The Company has a clear strategy to build a
leading emerging markets gold company with an initial focus on
Central Asia and the FSU through organic growth and selective
M&A.
Chaarat is engaged in active community engagement programmes to
optimise the value of the Chaarat investment proposition.
Chaarat aims to create value for its shareholders, employees and
communities from its high-quality gold and mineral deposits by
building relationships based on trust and operating to the best
environmental, social and employment standards. Further information
is available at www.chaarat.com
Appendix
Summary of the key terms of the increased Labro Term Loan
1. Principal - US$22.0 million.
2. Interest - 9.5% payable at maturity.
3. Maturity date - 31 December 2024.
4. Security package - includes the requirement that 100% of
any new incremental debt incurred must be used to prepay
the Labro Term Loan unless it relates to debt to fund project
finance for Tulkubash.
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END
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