UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 or
15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of December, 2015.
Commission File Number 001-32399
BANRO CORPORATION
(Translation of registrants name into English)
1 First Canadian Place
100 King Street West,
Suite 7070
Toronto, Ontario, Canada
M5X
1E3
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will
file annual reports under cover Form 20-F or Form 40-F
Form 20-F [X] Form
40-F [ ]
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Note: Regulation S-T Rule 101(b)(1) only permits the
submission in paper of a Form 6-K if submitted solely to provide an attached
annual report to security holders.
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
Note: Regulation S-T Rule 101(b)(7) only permits the
submission in paper of a Form 6-K if submitted to furnish a report or other
document that the registrant foreign private issuer must furnish and make public
under the laws of the jurisdiction in which the registrant is incorporated,
domiciled or legally organized (the registrants home country), or under the
rules of the home country exchange on which the registrants securities are
traded, as long as the report or other document is not a press release, is not
required to be and has not been distributed to the registrants security
holders, and, if discussing a material event, has already been the subject of a
Form 6-K submission or other Commission filing on EDGAR.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
|
BANRO CORPORATION |
|
|
|
/s/
Kevin Jennings |
Date: December 31, 2015 |
Kevin Jennings |
|
Chief Financial Officer |
-2-
INDEX TO EXHIBITS
-3-
Banro Announces US$98.75 Million Financing with
Resource Finance Works
|
|
Banro signs definitive agreements with Chinese mining
investment fund, Resource Finance Works (RFW), for US$98.75
million financing expected to close in January 2016 |
|
|
In addition, RFW acquires US$60 million of outstanding
debt and preferred shares from current investors |
|
|
Banro agrees to transfer funds to the Senior Notes
trustee securing remaining coupon payments on the Senior Notes
|
Toronto, Canada December 31, 2015 Banro Corporation
("Banro" or the "Company") (NYSE MKT - "BAA"; TSX - "BAA")
announces that it has signed definitive agreements with RFW (through its
affiliate RFW Banro Investments Limited) and with funds managed by Gramercy
Funds Management LLC (Gramercy) for an equity private placement, a term
loan facility, and a gold streaming transaction relating to the Twangiza mine,
providing total gross proceeds to the Company of US$98.75 million. RFW manages
the Baiyin Stream Partnership I, LP, a mining investment fund through which the
investment will be made, and which is led by the Baiyin Nonferrous Group Co.,
Ltd. (Baiyin), a strategic Chinese mining group based in Gansu, China.
The equity placement and gold streaming transaction are transacted solely with
RFW, while the term loan will be funded by RFW and investment funds managed by
Gramercy. Contingent on these transactions and in order to create alignment
amongst the parties, RFW has also entered into a definitive agreement with
Gramercy to purchase US$40 million of the outstanding Banro senior secured notes
issued by Banro on March 2, 2012 (the Senior Notes), and US$20 million
of the outstanding preferred shares issued by subsidiaries of Banro on February
28, 2014.
The closing of these transactions (the Closing), which
is expected to occur in January 2016, is subject to conditions precedent
customary for transactions of this nature, as well as certain necessary
regulatory approvals, including the approval of the Toronto Stock Exchange for
the private placement. The Company will continue to work with its financial
advisor, Long March Capital Limited, in addition to RFW and Gramercy in order to
obtain all required approvals to close the transactions. Implementation of RFW
and the Baiyin Stream Partnership structures, which is in progress at the time
of signing of the definitive agreements, and Baiyins investment therein are
subject to concurrent approval with the transactions.
We believe the long-term nature of the Twangiza streaming
arrangement and private placement, along with the committed strategic
relationships involved, will provide Banro with a solid base to achieve its
longer term growth objectives as well as the refinancing requirements in 2017,
commented Banro Board Chairman, Richard Brissenden.
The term loan facility represents a loan of US$22.5 million
with an initial maturity date of November 30, 2016, but which may be extended
until November 30, 2019 provided certain financial tests are met. The facility
bears interest at a rate of 8.5% per annum for the first two years of the term
and then at a rate of the 3 month LIBOR rate plus 8.0% for the last two years of
the term, with the interest payable quarterly and the principal repayable in
full at the end of the term of the facility. The loan may be prepaid at any time
without penalty. At any time following the second anniversary of the loan, the
lenders may require prepayment. On Closing, Banro will issue to the lenders a
total of 10 million common share purchase warrants (Warrants) of Banro
(5 million Warrants to RFW, which is advancing half of the loan, and 5 million
Warrants to Gramercy, which is advancing the other half of the loan), with each
such Warrant entitling the holder to purchase one common share of Banro at a
price of US$0.2275 until the date which is three years following the Closing.
The Twangiza streaming transaction provides for the payment by
the purchaser of a deposit in the amount of US$67.5 million and the delivery to
the purchaser over time of a certain percentage (the Entitlement
Percentage) of the life-of-mine gold production from the Twangiza mine (or
any other projects located within 20 kilometres from the current Twangiza gold
mine) based on the gold price at the time of delivery. The Entitlement
Percentage is 11% based on a gold price between US$1,150 and US$1,500 per ounce,
12.5% based on a gold price of less than US$1,150 per ounce, and 9.5% based on a
gold price greater than US$1,500 per ounce. Commencing January 1, 2016, once
total gold production from the Twangiza mine exceeds 1.14 million ounces, each
of the Entitlement Percentages above will thereafter apply at 50% of the above
percentages. The ongoing payments to Twangiza upon delivery of the gold are
US$150 per ounce. At any time after the third anniversary of the Closing,
Twangiza may, at its discretion, terminate the stream by paying to the purchaser
in cash a buyback price equal to an amount which would result in the purchaser
achieving an implied internal rate of return of 17.5% on the cash flows arising
from the stream during the period from Closing to the date that is 12 months
following the date of payment of the buyback price.
The private placement transaction provides for the issuance by
Banro to RFW of 50,000,000 common shares of Banro and 2.5 million Warrants, for
total gross proceeds to the Company of US$8.75 million. These Warrants will have
the same terms as the Warrants to be issued under the term loan transaction as
set forth above. RFW will hold approximately 16.6% of the outstanding common
shares of Banro upon completion of this private placement.
Baiyins investment in Banro through our offshore direct
investment fund is consistent with our strategy to invest in low cost mines with
large gold endowments and substantial growth opportunities, commented Baiyin
Chairman, Liao Ming. We will support Banro in unlocking the considerable
potential of the Twangiza-Namoya Gold Belt.
Holders of more than 50% of the Banro Senior Notes prior to the
transaction have agreed to provide the required consent to the amendments of the
Companys Note Indenture and related Collateral Trust Agreement in order to
secure the gold delivery obligations under the Twangiza streaming transaction by
way of a Parity Lien within the meaning of the Note Indenture. Banro has
agreed to place US$26.25 million of the proceeds from the financing in escrow
with the trustee for the Senior Notes to satisfy the remaining three interest
payments under the Senior Notes through the maturity date of March 1, 2017.
We are extremely pleased to welcome Baiyin as a key
stakeholder in Banro. Through this investment, our strategic interests are
substantially aligned as we pursue our mutual objective of supporting Banro so that it may realize its production
potential, commented Robert L. Rauch, Senior Partner, Portfolio Manager of
Gramercy Funds Management LLC.
2
The contemplated use of proceeds from these financing
transactions include:
|
|
Repayment of the Twangiza gold
forward sale agreements Tranche 1 and Tranche 2. |
|
|
Repayment of a DRC bank loan
facility nearing maturity and certain major project suppliers. |
|
|
Payment of accrued preferred
share dividends. |
|
|
Defeasement of future interest on
the outstanding Senior Notes. |
|
|
Certain capital expenditures at
the Twangiza mine to expand crushing capacity. |
|
|
General corporate and working
capital purposes. |
Copies of the main transaction documents for the private
placement, loan facility and Twangiza streaming transactions will be filed on
SEDAR at www.sedar.com and EDGAR at www.sec.gov.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these
securities, in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of
such jurisdiction. The securities have not been and will not be registered under
the United States Securities Act of 1933, as amended (the "U.S. Securities
Act"), or any state securities laws and may not be offered or sold within the
United States or to, or for the account or benefit of, "U.S. persons," as such
term is defined in Regulation S under the U.S. Securities Act, unless an
exemption from such registration is available.
Banro Corporation is a Canadian gold
mining company focused on production from the Twangiza mine, which began
commercial production September 1, 2012, and completion of its second gold mine
at Namoya located approximately 200 kilometres southwest of the Twangiza gold
mine. The Companys longer term objectives include the development of two
additional major, wholly-owned gold projects, Lugushwa and Kamituga. The four
projects, each of which has a mining license, are located along the 210
kilometre long Twangiza-Namoya gold belt in the South Kivu and Maniema provinces
of the Democratic Republic of the Congo (the DRC). All business
activities are followed in a socially and environmentally responsible manner.
Resource FinanceWorks Limited is the general partner for
the Baiyin Stream Partnership I, LP, an offshore mining investment fund
sponsored and funded by the Baiyin Nonferrous Group Co., Ltd. Baiyins business
is in resource development, extraction and refining, and has investments in the
Peoples Republic of China, South Africa and Peru. As at the end of 2014, Baiyin
had total and net assets of approximately US$5.4 billion and US$2 billion,
respectively, generating revenues of US$7.2 billion. The purchaser, RFW Banro
Investments Limited, is a special purpose vehicle and a wholly-owned subsidiary
of the Baiyin Stream Partnership I, LP.
Gramercy Funds Management LLC is a US$6 billion
dedicated emerging markets investment manager based in Greenwich, CT with
offices in London, Hong Kong, Singapore, Mexico City, and Buenos Aires. The
firm, founded in 1998, seeks to generate superior risk-adjusted returns through
a comprehensive approach to emerging markets supported by a transparent and
robust institutional platform. Gramercy invests through both alternative and
long-only strategies across all asset classes (sovereign USD and local currency
debt, investment grade and high yield corporate debt, distressed debt, equity,
private equity and special situations). www.gramercy.com.
3
Cautionary Note Concerning Forward-Looking
Statements
This press release contains forward-looking statements.
All statements, other than statements of historical fact, that address
activities, events or developments that the Company believes, expects or
anticipates will or may occur in the future (including, without limitation,
statements regarding future gold production and costs, potential mineral
resources and reserves, the closing of the financing transactions reported in
this press release and the anticipated effect of the said financing transactions
on the Companys operations and financial condition) are forward-looking
statements. These forward-looking statements reflect the current expectations or
beliefs of the Company based on information currently available to the Company.
Forward-looking statements are subject to a number of risks and uncertainties
that may cause the actual results of the Company to differ materially from those
discussed in the forward-looking statements, and even if such actual results are
realized or substantially realized, there can be no assurance that they will
have the expected consequences to, or effects on the Company. Factors that could
cause actual results or events to differ materially from current expectations
include, among other things: failure to complete the said financing
transactions; uncertainty of estimates of capital and operating costs,
production estimates and estimated economic return of the Companys projects;
the possibility that actual circumstances will differ from the estimates and
assumptions used in the economic studies of the Companys projects; failure to
establish estimated mineral resources and mineral reserves (the Companys
mineral resource and mineral reserve figures are estimates and no assurance can
be given that the intended levels of gold will be produced); fluctuations in
gold prices and currency exchange rates; inflation; gold recoveries being less
than those indicated by the metallurgical testwork carried out to date (there
can be no assurance that gold recoveries in small scale laboratory tests will be
duplicated in large tests under on-site conditions or during production);
uncertainties relating to the availability and costs of financing needed in the
future; changes in equity markets; political developments in the DRC; lack of
infrastructure; failure to procure or maintain, or delays in procuring or
maintaining, permits and approvals; lack of availability at a reasonable cost or
at all, of plants, equipment or labour; inability to attract and retain key
management and personnel; changes to regulations affecting the Company's
activities; the uncertainties involved in interpreting drilling results and
other geological data; and the other risks disclosed under the heading "Risk
Factors" and elsewhere in the Company's annual report on Form 20-F dated April
6, 2015 filed on SEDAR at www.sedar.com and EDGAR at www.sec.gov. Any
forward-looking statement speaks only as of the date on which it is made and,
except as may be required by applicable securities laws, the Company disclaims
any intent or obligation to update any forward-looking statement, whether as a
result of new information, future events or results or otherwise. Although the
Company believes that the assumptions inherent in the forward-looking statements
are reasonable, forward-looking statements are not guarantees of future
performance and accordingly undue reliance should not be put on such statements
due to the inherent uncertainty therein.
For further information, please visit our website at www.banro.com, or contact:
Martin Jones
+1 (416)
366-2221, Ext. 3213
+1-800-714-7938, Ext. 3213
info@banro.com
4
BAA (AMEX:BAA)
Historical Stock Chart
From Mar 2024 to Apr 2024
BAA (AMEX:BAA)
Historical Stock Chart
From Apr 2023 to Apr 2024