KBL gets default notice from Kidman
PERTH (miningweekly.com) – ASX-listed Kidman Resources has told debtor KBL Mining that it has appointed an investigator into the financial affairs of the company, claiming an event of default under a A$12.6-million loan.
Citing a clause in a March general security agreement between KBL and the original owner of the debt, Capri Trading, Kidman was claiming an event of default.
Kidman became a major shareholder and the owner of KBL’s principal secured loan facility, taking over the debt from Capri Trading. The A$12.6-million debt now owed to Kidman 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.
Since acquiring the debt, Kidman has attempted not only a board spill at KBL, citing concerns around KBL’s financial capability to repay the debt, but has 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.
The noteholder meeting, which was scheduled for Wednesday, was adjourned until January 6, owing to the absence of the required quorum.
Despite the lack of numbers at the noteholder meeting, KBL said on Wednesday that the company had received "overwhelming" support for the resolutions to be considered at the noteholder meeting.
KBL also said that the clause which Kidman relied upon in its event of default notice, did not, in fact, trigger an event of default, but only permitted an investigation if Kidman could provide a reasonable basis for believing that a default had taken place.
KBL has denied that an event of default has occurred, and has sought an explanation from Kidman as to the grounds on which its allegations were made.
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