Avocet Mining PLC Avocet disposes of one of its subsidiaries (9162H)
March 16 2018 - 3:00AM
UK Regulatory
TIDMAVM
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 J.P. Morgan Cazenove
Financial PR Corporate Broker
Boudewijn Wentink, CEO Tim Blythe Michael Wentworth-Stanley
Yolanda Bolleurs, CFO Camilla Horsfall
Megan Ray
+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.
(1) At 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
END
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