Battle intensifies as Kidman issues default on KBL debt
PERTH (miningweekly.com) – The battle between ASX-listed KBL Mining and its creditor Kidman Resources intensified on Friday as Kidman issued an event of default on a A$12.6-million debt, despite KBL claims that the company had no justification to do so.
Earlier this week, Kidman appointed an investigator into the financial affairs of KBL, citing a clause in a March general security agreement between KBL and the original owner of the debt, Capri Trading.
Kidman acquired the debt, which was secured against all of KBL’s assets, including its operating Mineral Hill base metals mine and its Sorby Hills lead/silver deposit, in Western Australia, from Capri Trading earlier this year.
Kidman said on Friday that it had appointed business recovery accountants to undertake an immediate review of KBL’s current financial position, with the debtor required to provide access to these investigators.
KBL on Friday maintained its insistence that there had been no event of default, and had retained lawyers to explain to Kidman that the company had no valid basis for considering an event of default.
Kidman said it had noted KBL’s denial of an event of default, but added that the company’s refusal to allow access to its financial affairs was, in itself, an event of default under the original debt agreement.
Since acquiring the debt, Kidman had attempted not only a board spill at KBL, citing concerns around KBL’s financial capability to repay the debt, but also launched litigation against KBL and two of its directors in an effort to prevent a noteholder meeting in which KBL was hoping to amend the terms of its convertible notes.
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