TSX-V- and JSE-listed Buffalo Coal has advised that private investment fund Resource Capital Fund (RCF) has concluded, for the most part, the sale of convertible debt of $27-million to Belvedere Resources, following Belvedere’s acquisition of RCF’s controlling stake in Buffalo.
RCF disposed of its ownership and control of Buffalo to Belvedere in June, an agreement which involves Belvedere assuming the $27-million convertible loan.
The loan, with a maturity date of June 30, 2023, is optionally convertible by Belvedere into common shares in the capital of Buffalo at the conversion rate of C$0.0469 a common share.
Belvedere was required to obtain written consent from Investec Bank on or before August 31 to assign the loan in Belvedere’s favour, which is the last pending condition to the deal.
While Investec is considering the request for providing the contemplated consent, RCF and Belvedere have agreed to extend the deadline for obtaining the consent to October 31.
Investec expected repayment of all loan facilities on or before August 31, in accordance with a change of control notice. Buffalo and Investec are discussing the final date and settlement amount of all monies due.
Belvedere paid $540 000 for the 347-million Buffalo shares and $2-million for the assumption of the loan, which was paid to RCF.
The shares represent 82% of the issued and outstanding share capital of Buffalo.
Buffalo owns a majority interest in two South African operating coal mines.