Completion of US$ 22 million Debt Reduction

RNS Number : 1899O

Chaarat Gold Holdings Ltd

05 February 2021

 

05 February 2021

Chaarat Gold Holdings Limited - (AIM:CGH)

  ("Chaarat" or the "Company")

Completion of US$ 22 million Debt Reduction

Chaarat (AIM:CGH), the AIM-quoted gold mining company with assets in the Kyrgyz Republic and Armenia is pleased to announce that, further to its announcement earlier this morning, Labro Investments Ltd. ("Labro") has now subscribed for 62,380,154 ordinary shares of US$0.01 each (the "Labro Subscription") in the Company at the Issue Price of 26 pence per share (the "Labro Subscription Shares").  The Labro Subscription value of US$ 22.22 million has been satisfied by the conversion of all of the outstanding US$ 22 million term loan due to Labro from the Company as well as the US$ 0.22 million of accrued interest (the "Labro Term Loan").

Debt to Equity Conversion

With the above mentioned Labro debt-to-equity conversion the Labro Term Loan has been extinguished, saving the Company US$ 2.1 million in interest payment per year in 2021 to 2024.

The Labro Term Loan conversion reduces the Chaarat debt position to US$ 46.5 million, a reduction of 33%.  Through the Labro Subscription, Labro now has an approximately 42% equity ownership of the Company after issuance of the Initial Subscription Shares (as defined and described in the Company announcement this morning).

An additional 55,240 new ordinary shares have been issued to Labro (the "Labro Fee Shares") pursuant to a drawdown made by the Company in November 2020 on the working capital facility from Labro (the "Labro Facility").

Application has been made to the London Stock Exchange for the Labro Subscription Shares¹ and the Labro Fee Shares¹ to be admitted to trading on AIM ("Admission"), and it is expected that Admission will become effective and dealings in the new ordinary shares will commence at or around 8:00am (London time) on 11 February 2021.

Following Admission:

• the Company's enlarged issued share capital will comprise 668,405,692 ordinary shares of US$0.01 each. This figure may be used by shareholders of the Company as the denominator for the calculations by which they will determine whether they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules Sourcebook²;

• Labro and Martin Andersson will hold the following ordinary shares of US$0.01 each in the capital of the Company:

	№ of shares	% of issued share capital
Labro	281,527,967	42.12%
Martin Andersson	5,829,996	0.87%
Combined Total	287,357,963	42.99%

Notes: 1) calculations are based on the Company's enlarged issued share capital following the issue of the Initial Subscription Shares announced this morning, the Labro Subscription Shares and the Labro Fee Shares

Related Party Transaction

The arrangements with Labro to convert the Labro Term Loan constitutes a related party transaction under AIM Rule 13 of the AIM Rules for Companies (the "AIM Rules") 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 (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.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014

¹ The Labro Subscription Shares and the Labro Fee Shares, when issued, will be fully paid, and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of issue. 

² It is expected that further shares will be issued to satisfy the non-binding commitments for subscriptions referred to in the Company's announcement released earlier today.  A further update of the figure may be used by shareholders of the Company as the denominator for the calculations by which they will determine whether they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules Sourcebook will be provided in due course. 

³ Regulation 19 Waiver

There is a provision in the Company's articles of association (Regulation 19) which states that the Board has the right to require any holder of more than 20% of ordinary shares in the capital of the Company (the "Ordinary Shares") to make a mandatory offer to all the Company's shareholders to acquire their Ordinary Shares if they acquire an additional interest in any Ordinary Shares.

On 5 February 2021, the Board exercised its discretion to waive the requirement for a mandatory offer for the Company by Labro

-  to allow Labro to receive the Labro Subscription Shares

-  To allow Labro to receive the Labro Fee Shares.

⁴ Labro also holds loan notes for US$1,000,000 (the "LoanNotes") convertible into 2,849,330 ordinary shares of US$0.01 each in the capital of the Company ("Ordinary Shares") (assuming full conversion of principal and interest to maturity).  If all the Loan Notes were subsequently converted (assuming full conversion of principal and interest to maturity if no options to subscribe for Ordinary Shares issued by the Company were exercised, no other convertible loan notes issued by the Company were converted and no other Ordinary Shares were issued), Labro would hold 284,377,297 Ordinary Shares representing 42,37% of the resulting enlarged share capital.

⁵ Pursuant to restricted share awards and share options granted by the Company to Mr Andersson, he may become entitled to a further 18,474,057 Ordinary Shares. If Mr Andersson were to acquire all the shares to which he may become entitled (and no other options to subscribe for Ordinary Shares issued by the Company were exercised and no other Ordinary Shares were issued), on a combined basis, Labro and Mr Andersson would together hold  308,319,114 Ordinary Shares representing 44.84% of the resulting enlarged share capital.

Enquiries

Chaarat Gold Holdings Limited	[phone]
Artem Volynets (CEO)	[e-mail]
Canaccord Genuity Limited (NOMAD and Joint Broker)	+ 44 (0)20 7523 8000
Henry Fitzgerald-O'Connor
James Asensio
finnCap Limited (Joint Broker)	[phone]
Christopher Raggett
Panmure Gordon (UK) Limited (Joint Broker)	[phone]
John Prior Hugh Rich

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 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 1 - PDMR forms

1	Details of the person discharging managerial responsibilities / person closely associated
a)	Name	Labro Investments Limited
2	Reason for the notification
a)	Position / status	Person/Entity closely associated with the Chairman
b)	Initial notification / amendment	Initial notification
3	Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)	Name	Chaarat Gold Holdings Limited
b)	Legal entity identifier	213800T2A5CV84VTFJ70
4	Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)	Description of the financial instrument, type of instrument	Ordinary shares of US$0.01 each
	Identification code	VGG203461055
b)	Nature of the transaction	Acquisition by way of a placing
c)	Currency	GBP
d)	Price(s) and volume(s)		Price(s)	Volume(s)
			26p	62,380,154
e)	Aggregated information · Aggregated volume · Aggregated price · Aggregated total	62,380,154 26 pence £16,218,840.00
f)	Date of the transaction	5 February 2021
g)	Place of the transaction	XLON

1	Details of the person discharging managerial responsibilities / person closely associated
a)	Name	Labro Investments Limited
2	Reason for the notification
a)	Position / status	Person/Entity closely associated with the Chairman
b)	Initial notification / amendment	Initial notification
3	Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)	Name	Chaarat Gold Holdings Limited
b)	Legal entity identifier	213800T2A5CV84VTFJ70
4	Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)	Description of the financial instrument, type of instrument	Ordinary shares of US$0.01 each
	Identification code	VGG203461055
b)	Nature of the transaction	Remuneration in shares under a working capital facility
c)	Currency	GBP
d)	Price(s) and volume(s)		Price(s)	Volume(s)
			33p	55,240
e)	Aggregated information · Aggregated volume · Aggregated price · Aggregated total	55,240 33 pence £18,229.20
f)	Date of the transaction	5 February 2021
g)	Place of the transaction	XLON

 

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