KINGSROSE Mining has raised $6.4 million via a secured convertible loan facility to assist with the ongoing restructure of its financial arrangements and operations at the Way Linggo Project in Sumatra. Administrators advise that the funds will be applied to the ongoing restructure of the company, to provide working capital and to provide funding to its 85%-owned subsidiary PT Natarang Mining (NM), owner and operator of the project.

The convertible facility, which has been provided by a group of professional and sophisticated investors, can be converted to equity at four cents per share, although this will require shareholder approval.

If the loan is not converted to equity, Kingsrose is required to repay it on the latter of termination of the administration or any deed of company arrangement which may be entered into by Kingsrose.

The funding to PT NM will be provided progressively over the next few months and will be used by PT NM to supplement its working capital requirements while further capital development is undertaken at Way Linggo to enable the operation to become cashflow-positive.

Administrator Michael Ryan said, “The convertible facility is an important step in the restructuring process and will assist with the re-organisation of the operations at Way Linggo.

“We have made strong progress and we will continue to work alongside the management of Kingsrose as we move towards bringing Kingsrose out of administration and resumption of trading in its shares.”

As a result of this fundraising, the debt restructuring arrangements with Kingsrose’s secured lenders, Michael John Andrews, Great Golden Investment Ltd (GGIL) and Beaurama Pty Ltd, are now effective.

Under the terms of the Beaurama agreement, the Beaurama debt of A$4.4 million will now be unsecured with no further interest accruing until July 2020 after which interest will accrue at 5% per annum, payable monthly in arrears. To the extent it has not been repaid earlier, the Beaurama debt will be deferred to a single payment due on November 30, 2023.

It is anticipated that based on executed agreements received, a total of 264 million shares will be issued under the convertible facility and the Michael John Andrews and GGIL debt to equity conversion. The new shares will constitute approximately 38% of the issued capital.

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