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African Minerals Ltd (AMI)

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Friday 06 March, 2015

African Minerals Ltd

Administrators appointment and Nomad resignation

RNS Number : 8223G
African Minerals Ltd
06 March 2015
 



6 March 2015

African Minerals Limited

("African Minerals", "AML", or "the Company")

 

Decision to appoint administrators and resignation of Nomad

The Board of African Minerals Limited has decided to apply to appoint administrators of the Company. Following the events announced last week and earlier this week, and further discussions with Shandong Iron and Steel Group ("SISG"), the Board has concluded that there is no reasonable prospect of it being able to achieve a negotiated solution with the Group's secured lender and the 25% shareholder in Tonkolili Iron Ore (SL) Ltd and African Railway and Port Services (SL) Ltd (the "Operating Companies"). The secured lender and the 25% shareholder in the Operating Companies are both now under the control of SISG.

The Company is working to identify an appropriate insolvency practitioner to represent and protect the interests of the creditors and stakeholders of the Company.

As a result of this decision AML's Nominated Adviser and Broker, Jefferies International Limited, has today resigned with immediate effect. Failure of the Company to appoint a replacement Nominated Adviser within one month from today will result in cancellation of the listing of its shares on AIM.

The decision to apply to appoint administrators of AML does not directly affect the situation of the Operating Companies which own and operate the Tonkolili iron ore mine and related infrastructure. As signalled on 3 March 2015, these companies are now completely under the control and responsibility of SISG through one subsidiary which has a 25% shareholding and another which, as secured lender, has taken control (but not ownership) of AML's 75% shareholding through enforcement of security over shares. As a result, AML no longer has any ability to make decisions in respect of the Operating Companies.

The future of the Operating Companies, and their ability to pay creditors, obtain funding, and restart operations, is now entirely in the hands of SISG. Any further support or interaction between the Operating Companies and AML, including transfer of any staff and assets, and resolution of financial aspects, must be negotiated between SISG and the administrators, once appointed.

The Company has been advised that the injunction referred to in its 27 February 2015 announcement has been extended by the Sierra Leone High Court. The injunction restrains the defendants (Tonkolili Iron Ore (SL) Ltd, African Railway & Port Services (SL) Ltd, African Power (SL) Ltd, AML and Frank Timis) from unilaterally taking any steps that will lead to the dissolution, liquidation, winding up or placing into administration of any of the defendant companies. The injunction continues until the hearing and determination of intended or proposed arbitration proceedings. The Company is not aware of the commencement of such proceedings. The Company does not consider this injunction is capable of preventing AML from entering administration.

Funds have been released from the Operating Companies' restricted bank account in Hong Kong to cover payment of February salaries for national and expatriate staff in Sierra Leone and these payments are now being processed.

 

Contacts:

African Minerals Limited

+44 20 3435 7600

Matthew Hird / Francis O'Neill

Tavistock

+44 20 7920 3150

Jos Simson / Nuala Gallagher / Mike Bartlett

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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