Sunkar Resources PLC NEW LOAN FACILITY (0094I)
May 27 2014 - 2:02AM
UK Regulatory
TIDMSKR
RNS Number : 0094I
Sunkar Resources PLC
26 May 2014
27 May 2014
SUNKAR RESOURCES PLC
("Sunkar" or the "Company")
NEW LOAN FACILITY
Sunkar (AIM: SKR) announces that it has raised $0.1 million
through a new loan facility ("SAPC Loan") provided by Sun Avenue
Partners Corporation ("SAPC"), which was entered into on 26 May
2014.
Since the last Company update, as set out in the announcement on
2 April 2014, the Company's financial position has worsened
significantly.
The funds raised by the convertible loan note, issued on 7 April
2014, were anticipated by the board of Sunkar (the "Board") to
provide sufficient working capital until additional earth moving
contracts could be agreed and monies from the second earth moving
contract were received.
However, cash receipts due under the second earth moving
contract have been delayed and a third earth moving contract has
still not been concluded.
Accordingly, the Company's working capital position is
materially below its previous forecast and, as a result, the
Company required an immediate working capital injection in order to
make the payments due under its credit line facility with Asia
Credit Bank (Kazakhstan) ("ACB Loan"). The Board is grateful to
SAPC for its continued support.
The Board believes that it is likely that further financial
support will be required from SAPC, particularly in order to make
further payments under the ACB Loan, should the position with the
second and third earth moving contracts not be resolved in the very
short term.
Accordingly, the Company will provide an update on the Board's
further funding discussions with SAPC, with regard to securing such
funding, in the next few weeks.
The funds provided by the SAPC Loan will be used for general
working capital requirements and to make payments due under the ACB
Loan.
Terms of the SAPC Loan
The SAPC Loan is for a principal sum of $0.1million and is
unsecured. Repayment is due, in full, not later than 31 December
2014, together with accrued interest, payable at 10 per cent. per
annum. The Company has the option to prepay the SAPC Loan in one or
more instalments.
The SAPC Loan is subject to standard events of default,
including insolvency and change of control, at which time the
facility, plus any accrued interest would be immediately due and
payable to SAPC. The SAPC Loan is subject to English law and the
jurisdiction of the English courts.
Related Party Transaction
SAPC is a substantial shareholder and accordingly the SAPC Loan
is a related party transaction under the AIM Rules. With regard to
the Company's requirement for further funding, the Directors have
considered alternative sources of funding, including bank debt and
the issue of equity, and have concluded that such alternatives
would not be available to the Company, within the required
timeframe, on terms more beneficial than those offered by SAPC.
The Directors consider, having consulted with the Company's
nominated adviser, Strand Hanson, that the terms of the SAPC Loan
are fair and reasonable insofar as the Company's shareholders are
concerned.
For further information, please contact:
Sunkar Resources plc
Teck Soon Kong, Chairman Tel: +44 20 7397 3730
Serikjan Utegen, CEO
Strand Hanson Limited
Stuart Faulkner Tel: +44 20 7409 3494
Andrew Emmott
James Dance
Bankside Consultants
Simon Rothschild Tel: +44 7703 167065
This information is provided by RNS
The company news service from the London Stock Exchange
END
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