JSE- and TSX-listed Eastern Platinum (Eastplats) has reached a settlement agreement with AlphaGlobal Capital to dismiss all claims against Eastplats and its subsidiaries in exchange for shares.
Eastplats will issue eight-million common shares of the company at a deemed subscription price of C$0.23, valued at C$1.8-million in total, and six-million common share purchase warrants exercisable at C$0.24, each entitling the holder to acquire one common share for a period of two years.
The claims against Eastplats were first initiated with start of litigation in South Africa in 2017 and continued through litigation in the British Virgin Islands in 2018, and were in relation to the payment of amounts alleged to be owing under a 2007 promissory note entered into by the company and AlphaGlobal.
AlphaGlobal sought payment of the amount of R30-million, or C$2.4-million, plus an amount that AlphaGlobal claimed was owing for default interest from 2007, for an estimated total claim of more than R170-million, or C$13.6-million.
The settlement agreement will settle all matters related to the claims and any litigation outstanding between the parties.
Eastplats CEO Diana Hu says this settlement closes a long-standing chapter and eliminates a significant contingency for the company, created years ago by the previous management of the company.