ASX-listed Firestone Energy, the 45.88% subsidiary of the Waterberg Coal Company, has signed a term sheet for the provision of US$5 million in new funding by way of the issue of convertible notes (CN), each with a current face value of R0.07.
Completion of the transaction is subject to execution of formal documentation and completion of due diligence by Four Oaks Credit Fund, with whom the term sheet was signed.
The funds are proposed to be drawn down over two tranches comprising US$2.7 million and US$2.3 million respectively. The Tranche 1 CN will be issued pursuant to the company’s current 15% capacity under ASX Listing Rule 7.1 with Tranche 2 to be issued subsequent to shareholder approval at the company’s AGM to be held on 28 November 2014.
Funds raised are to be used for advancing Firestone’s Waterberg Coal Project Joint Venture located in the Waterberg district of Limpopo Province, South Africa and for other working capital purposes.
The face value of each note represents a 28% premium to the prior 20 day VWAP of Firestone’s securities on the ASX.
“The company is pleased to have the support of Four Oaks Credit Fund Limited to enable it to progress the company’s Waterberg Coal Project Joint Venture. Shareholders are advised to continue to exercise caution as discussions relating to further funding are ongoing,” Firestone Energy said in a statement.
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