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Akobo finalises debt restructuring agreement

28th February 2024

By: Darren Parker

Creamer Media Contributing Editor Online

     

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Scandinavia-based gold exploration and mining company Akobo Minerals, which has operations in Ethiopia, has finalised an agreement regarding completion of its debt restructuring.

This follows the conclusion of negotiations and amendments to the secured debt in the company with its lender Monetary Metals Bond.

The restructuring provides the company with improved short- and medium-term liquidity and increases the overall robustness during the development stage or ramp-up phase of the Segele mine.

The amendments include a waiver of cash interest payments with accrual of paid-in-kind interest, an increase in liquidity buffer by about $1.5-million before full production ramp-up, as well as an extension of the maturity date by one full year to December 2025.

Completion of the debt restructuring is subject to Akobo raising a minimum of NKr40-million in gross cash proceeds, which through the previously announced NKr6-million bridge loan and completion of the private placement will be fulfilled, and that warrants issued to Monetary Metals equating to 2% of Akobo's equity will be reset with a strike price equal to the offer price in the private placement being NKr1. 

Akobo Minerals CEO Jørgen Evjen said on February 28 that this restructuring provided the company with enhanced flexibility and a longer maturity period.

Additionally, the company has successfully completed a private placement of about 34-million offer shares, raising about NKr34-million in gross proceeds.

This placement corresponds to about 64% of the outstanding shares in the company, at an offer price of NKr1 per offer share.

The private placement was resolved by the board of directors following the authorisation to issue new shares granted by an extraordinary general meeting on February 2.

The net proceeds from the private placement will be used to finance the construction phase of the Segele plant and subsequent production ramp-up phase, to reach steady production and positive cash flow, as well as for general corporate purposes, Akobo explained.

The Akobo board has also resolved to proceed with a subsequent rights issue of new shares to raise gross proceeds of up to about €2.5-million and intends to propose a set-off issue of up to about NKr85.6-million in relation to the conversion of two convertible loans and a bridge loan.

“I extend my sincere appreciation to all participants for their support, and I am genuinely grateful for their contribution towards moving Akobo Minerals into the next phase of gold production and continued exploration," Evjen said.

In addition, Akobo’s board said it had resolved to convene an extraordinary general meeting on April 2 to decide on the set-off issue to lenders of the bridge loan as announced in the company’s stock exchange announcement made on February 8 and the holders of the two convertible loans announced by the company on March 20 and September 6 last year. 

The company said lenders representing 83% of the bridge loan had committed to convert the outstanding amount thereunder. Lenders representing 92% of the total outstanding amount under the convertible loans had committed to the same.

The remaining lenders under the convertible loans and the bridge loan will be offered the opportunity to convert their respective portions of the convertible loans and the bridge loan.

Conversion of the bridge loan and the convertible loans into new shares in the company will be the same price per share as in the private placement, Akobo said.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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