TSX-listed Lydian International has entered into a second amended and restated (A&R) forbearance agreement with its senior lenders, stream financing providers and equipment financiers.
Lydian previously reported that following a change in the Armenian government in May 2018, demonstrations and road blockades, initially primarily targeted at the mining sector, occurred sporadically throughout the country. A continuous “illegal blockade” at Lydian’s Amulsar gold project has been in place since June 22, 2018, resulting in the suspension of construction activities.
Lydian stated that the Armenian government’s actions and inactions have substantially restricted its access to capital and “caused conditions to occur that were deemed events of default by the senior lenders, stream financing providers, and equipment financiers.”
As a result, in December 2018, Lydian entered into an A&R forbearance agreement.
In the latest A&R forbearance agreement, Lydian’s financiers have agreed to “continue to temporarily suspend all principal and interest payments due and payable; and continue to forbear from declaring or acting upon, or exercising default-related rights or remedies under such creditor’s financing agreement with respect to certain events of default, in each case, until the earlier of September 30, the occurrence of an additional event of default under such creditor’s financing agreement, or any breach of the A&R forbearance agreement.”
In accordance with the latest agreement, Lydian will issue 23.04-million warrants to AB Svensk Exportkredit and 4.75-million warrants to Ameriabank CJSC, pursuant to separate warrant certificates which would represent 3.5% of the issued and outstanding ordinary shares of Lydian.
The warrants will be ordinary share purchase warrants, with each warrant being exercisable for one ordinary share of Lydian. The warrants will have a term of five years and holders will have the ability to exercise the warrants on a cashless basis.