Convertible Loan Notes and Loan Note Reprofiling

RNS Number : 9416M

Regency Mines PLC

14 January 2019

 

Regency Mines Plc

("Regency" or the "Company")

Issue of Convertible Notes and Warrants

Partial Repayment and Reprofiling of Loan Note

14 January 2019

Regency Mines Plc, the natural resource development company with interests in hydrocarbons and battery metals, announces that it has raised £676,000 by the issue ("Tranche 1") of £676,000 of Convertible Notes ("Notes") with accompanying Warrants ("Warrants") to institutional and high net worth investors.

At the same time, the Company announces, further to the announcement on 6 June 2018 of the taking out of a loan ("Loan") by means of a US$1,600,000 Loan Note ("Loan Note") from institutional  investors the partial repayment and restructuring of the Loan Note under the terms of a Loan Agreement Supplemental Deed ("Deed") dated 11 January 2019. 

Andrew Bell, Chairman, comments: "By issuing the May 2020 Notes and retiring a significant portion of Loan Note outstandings, while reprofiling the balance, Regency has shifted the main burden of any repayments into 2020. This clearer runway through 2019 and into next year gives us more time to unlock and build value, and reduces short-term uncertainty.  Our primary focus  is on growing cash flows from our coal operations through 2019 and generating cash remittances back into the parent company.  In other parts of our business we see  opportunities for profit also demanding our attention. For us to be in a position to do justice to these opportunities, this first step was a prerequisite."   

Terms of the Notes and Warrants

The Notes are being issued at par and are convertible into Ordinary Shares of £0.0001 in Regency ("Shares") at a price of 0.42 pence per Share. Each Note has a denomination of £1,000 and is thus convertible into 238,095 new Shares in the Company. Conversion may take place at any time up to the final redemption date of 30 May 2020.

Each Note holder also receives 119,047 Warrants for each Note subscribed. Each Warrant entitles the holder to subscribe for one Share at any time up to 31 May 2021 at a price of 0.6 pence per Share.

The interest rate on the Notes is 12.5% per annum, accruing monthly.

Up to £1,100,000 of Notes may be issued, in one or more tranches. The maximum number of new Shares that could fall to be issued upon exercise of all of the Notes issued in Tranche 1 is 160,714,125 and the maximum number of new Shares that could fall to be issued upon exercise of all of the Warrants issued in Tranche 1 (for an additional consideration to the Company of £482,140) is 80,356,725.

Terms of the Deed

Under the terms of the Loan Note announced on 6 June 2018, the US$1,600,000 was borrowed from institutional investors (being Riverfort Global Opportunities PCC Limited, formerly Cuart Investments PCC Limited and YA II PN, Ltd, hereafter defined as "the Lenders") for an initial term of six months extendable for a further six months upon payment of a 5% fee being $80,000 (the "Extension Fee"). If the term were extended, a payment schedule payable either in cash or in shares was to be applied.

The Deed executed on 11 January 2019 with the Lenders supplements and amends the Loan Note by providing as follows:

·    A US$580,000 repayment will be made following execution of the Deed, of which $500,000 will then be subscribed by the Lenders for 395 of the Tranche 1 Notes at a cost of £395,000;

·    A US$160,000 repayment will be made from the proceeds of any third party financing including the issue of any further tranche of the Notes;

·    The Extension Fee and $20,000 of a restructuring fee of US$156,000 ("Restructuring Fee") becomes immediately payable in respect of which the lenders have subscribed for 22,571,428 new Shares in Regency at a price of 0.35 pence per Share;

·    The balance of the restructuring fee becomes payable at maturity of the Loan ("Maturity") which is extended to 28 February 2020 at an interest rate of 12% p.a.;

·    From May 2019 to February 2020 Regency will make monthly payments of principal and interest amounting to US$50,000 per month;

·    Bullet payment of balance including interest and the aforementioned balance of the Restructuring Fee at Maturity;

·    Should the Company complete any financing transaction over £200,000 while Loan amounts remain outstanding, one third of net proceeds shall be applied to early repayment of the Loan.

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

For further information, please contact:

Andrew Bell 0207 747 9960                                                       Chairman Regency Mines plc

Scott Kaintz 0207 747 9960                                                        Director Regency Mines plc

Roland Cornish/ Rosalind Hill Abrahams 0207 628 3396        NOMAD Beaumont Cornish Limited

Jason Robertson 0207 374 2212                                                Broker First Equity Limited

 

END

 

 

IODKXLFFKFFZBBB