Avesoro has entered into a loan agreement in connection with an additional working capital facility of up to US$5,000,000 with Avesoro Jersey to assist with satisfying the company’s near term cash-flow needs.
The company has drawn down the entire amount available under the new facility and the funds have been made available for general working capital purposes.
The new facility is unsecured and ranks subordinated to the company’s existing facilities.
Interest will be charged on the drawn amount at a fixed rate of 3% per annum.
The new facility is due to be repaid in full no later than 12 months following draw-down and has no early repayment penalty.
Following draw-down of the new facility, the balance of working capital loans provided by Avesoro Jersey is US$42,235,025.
The company has agreed to the following conditions in relation to the new facility:
- The company will not incur any additional indebtedness or issue any equity interests in the company until completion of its next AGM without the unanimous approval of the The company's board of directors
- The company will not file or initiate any insolvency proceedings until completion of its next AGM without the unanimous approval of the board
- Avesoro Resources will not terminate the employment or appointment of its CEO or CFO until completion of its next AGM without the unanimous approval of the board
- The effect of the final condition listed above is to amend the Relationship Agreement between Avesoro Jersey and the company by potentially increasing the number of directors appointed to the board by Avesoro Jersey
- Avesoro Jersey has reiterated its commitment to continue to support the financial needs of the company while the takeover bid is ongoing and will not seek any changes to the board during that time
The company also announces that it has received loan deferrals as follows:
- US$10 million loan principal and associated interest due to Avesoro Jersey under an earlier working capital facility from the due date of March 13, 2020 to October 31, 2020
- Deferral of payment obligations under the equipment finance loans from Mapa Insaat Ve Ticaret AS, a related party, until October 31, 2020 of which c.US$5.5 million and EUR2.5 million had been overdue and a further c.US$5.2 million and EUR2.7 million would have fallen due for payment before October 31, 2020.