Issue of Equity

RNS Number : 6297T

Red Rock Resources plc

17 December 2012

 

Red Rock Resources Plc

("Red Rock" or the "Company")

Placement of Shares and Loan Note Redemption

17 December 2012

Red Rock Resources plc ("Red Rock" or the "Company") announces that it has placed 60,000,000 new ordinary shares of 0.1p each (the "Ordinary Shares"), with institutional and private clients, representing approximately 5.52% of the Company's issued share capital at a price of 1.0 pence per share to raise £600,000 (the "Placing") gross.  Credit Suisse Nominees (UK) Ltd. has subscribed for 23,000,000 new ordinary shares (and will hold 6.26% of the Company's issue shared capital upon completion of the placing), with other placees holding the balance. Investors participating in the placing shall be entitled to receive 1/3^rd of a warrant for each ordinary share entitling the warrantholders to subscribe for a maximum of 20,000,000 ordinary shares at an exercise price of 1.5 pence over a subscription period of eighteen months.   

The net proceeds of the Placing will be applied towards two objectives.  £335,000 will be utilized toward part redemption of the Company's Secured Loan Notes 2013, and the balance will be utilized by the Company for working capital purposes.  This will leave the residual value of the Secured Loan Notes 2013 at £956,654 with an ultimate repayment date of 15 July 2013.   Thirty days written notice is to be given to loan note holders immediately, and the repayment will occur in mid-January 2013. 

Company Chairman Andrew Bell comments:

"These are challenging markets, and although as previously announced, the Company hopes to complete certain substantial asset sale transactions, it is unable to predict the timing of such sales precisely. Therefore deleveraging the business and reducing the exposure to movements in the price of its main listed investment holding is the most prudent course to reduce the overall risk profile.  While the Company focuses on the execution of the proposed sales of its iron-ore project in Greenland and Colombian gold operations, along with restructuring activities associated with its holdings in Kenya, it has moved to reduce its corporate debt and overall liability level.  In this derisking exercise the exposure to movements in the Jupiter Mines share price was reduced by the October sale, and now debt exposure has been brought to more appropriate levels by a Loan Note reduction of over £1.33m. We continue to focus on execution of the key transactions that will enable us to crystallise shareholder value."

Application will be made to the London Stock Exchange in two tranches. The first tranche of 50,000,000 Ordinary Shares, which rank pari passu with the Company's existing issued ordinary shares, are to be admitted to trading on AIM.  Dealings are expected to commence at 8.00 a.m. on or around 20 December 2012, following which the Company's total issued ordinary share capital will be 1,076,137,800 ordinary shares of 0.1p. 

The second tranche of 10,000,000 ordinary shares will be admitted approximately 30 days from the date of this announcement. This second tranche representing £100,000 in value will be transferred directly to loan note holders in satisfaction of the Company's Secured Loan Notes 2013, as referenced above, in order to retire part of the outstanding loan. Following the second tranche of 10,000,000 Ordinary Shares, the Company's total issued ordinary share capital will be 1,086,137,800 ordinary shares of 0.1p. 

For further information contact:

Andrew Bell 020 7402 4580 or 07766 474849                        Chairman Red Rock Resources plc

Sandra Spencer 020 7402 4580 or 07757 660 798                 Investor Relations Red Rock Resources plc

Gerry Beaney / Daniela Amihood 020 7383 5100               NOMAD Grant Thornton Corp Finance

Nick Emerson 01483 413500                                                        Broker Simple Investments Ltd

Updates on the Company's activities are regularly posted on its website, www.rrrplc.com.

 

END

 

 

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