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Avocet Mining Plc (AVM)

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Friday 16 March, 2018

Avocet Mining Plc

Avocet disposes of one of its subsidiaries

RNS Number : 9162H
Avocet Mining PLC
16 March 2018
 

 

 

Avocet disposes of one of its subsidiaries

 

Avocet Mining Plc ("Avocet" or the "Company") announces today that it has sold one of its subsidiary companies, the wholly-owned Norwegian entity Wega Mining AS ("Wega Mining") and certain intercompany receivables of the Company's group to Natholmen AS for a total consideration of USD 400,000 in cash (the "Disposal").

Signing and completion of the Disposal have taken place simultaneously: Avocet has received the cash proceeds.

BACKGROUND

Discussions between the Company and its secured creditor, Manchester Securities Corp. ("Elliott") regarding the restructuring of its overdue loans to the Company of in total USD 29.2 million are continuing.

In this context, Avocet is taking all practicable actions to minimise its costs and streamline its remaining responsibilities, activities and group structure. Together with the sale of its Burkina Faso assets, the disposal of Wega Mining is part of that larger restructuring effort.

TRANSACTION DETAILS

The transaction comprises a sale by the Company of the entire issued share capital of Wega Mining to Natholmen AS for USD 1 in cash, pursuant to a share purchase agreement entered into today (the "Agreement"). The shares in Wega Mining are being sold on an "as is/where is" basis. No warranties are being given in the Agreement other than with regard to title and capacity.

Wega Mining is the shareholder of a number of companies, including Wega Mining Guinée SA. This entity has, after the transfer of its interest in the Tri-K mining and exploration permits into the Avocet's joint venture with Managem as part of the first closing in May 2017, no assets other than a receivable in relation to a possible reclaim of VAT. In relation to this claim the Agreement includes a mechanism to share equally any amounts received (after costs) if and when paid by the tax authorities.

In addition, the transaction involves the sale by Avocet of certain intercompany receivables owed to the Company by Wega Mining and its subsidiaries for a total cash consideration of USD 400,000.

In advance of the Disposal, Wega Mining has, against partial settlement of an intercompany receivable owed by Avocet to Wega Mining, assigned to Avocet the deferred part of the consideration owed to Wega Mining from the recent sale of the Burkina Faso assets.

USE OF PROCEEDS

Given the Company's current circumstances and in order to enable the Company to resolve its affairs, Elliott has agreed to the Disposal and to release its security over the shares in Wega Mining and its subsidiaries.

Discussions with Elliott regarding the restructuring of Avocet's debts will continue, including the possible use of the proceeds of the Disposal for the partial repayment of Elliott's debt. In this context, Avocet will be taking all practicable actions to minimise its costs and streamline its remaining responsibilities, activities and group structure.

APPROVAL OF TRANSACTION

Considering the above and the support of Elliott for the transaction, the board of the Company believes that the terms of the Disposal are not unreasonable and it does not disadvantage any other stakeholder of the Company given the high level of debt in the Company. It has therefore entered into the Agreement. This transaction does not require shareholder approval.1



 

 

FOR FURTHER INFORMATION PLEASE CONTACT

Avocet Mining PLC

Blytheweigh

Financial PR

J.P. Morgan Cazenove

Corporate Broker

Boudewijn Wentink, CEO
Yolanda Bolleurs, CFO

Tim Blythe

Camilla Horsfall

Megan Ray

 

Michael Wentworth-Stanley

+44 20 3709 2570

+44 207 138 3204

+44 20 7742 4000

 

 

NOTES TO EDITORS

 

Avocet Mining PLC ("Avocet" or the "Company") is an unhedged gold mining and exploration company listed on the London Stock Exchange (ticker: AVM.L) and the Oslo Børs (ticker: AVM.OL). The Company's principal activities are gold mining and exploration in West Africa.



1At the extraordinary general meeting of the Company of 22 December 2016 a resolution was passed to transfer the Company's listing on the London Stock Exchange from the Premium listing segment to the Standard listing segment of the Official List. See paragraph 6 of Part VII (Summary of the Key Differences between the Standard and Premium Listing Categories) of the Shareholders' Circular of 29 November 2016 on page 43: 'A Standard Listing does not require a company to comply with the provisions of Listing Rule 10 which sets out requirements for Shareholders to be notified of certain transactions and to have the opportunity to vote on proposed significant transactions.'


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