MACA Limited (ASX: MLD) today announced that the company has reached an agreement with dually listed Great Panther Silver Limited in connection with repayment of $54.7 million loan to MACA due from Beadell Resources which is to be acquired by Great Panther.
In the market release dated 22 June 2018, MACA announced the termination of mining contract with Beadell Resources leading to which the company entered into a loan agreement for balance of payments.
Under the agreement, all amounts due to MACA by Beadell including unbilled accruals, termination costs, loans, unpaid invoices, demobilization and fleet purchase costs were consolidated into one aggregate loan amount that stood at $54.7 million. As per the original terms of loan agreement, initial payment of $3 million was fixed due following closing of the financing, a further payment of $3 million on 31 March 2019 and then monthly payments of $1.5 million commencing 1 July 2019 was determined until the loan is repaid or 30 June 2022 whichever is earlier.
Later, on 24th September 2018, Toronto and New York’s exchange listed precious metal company, Great Panther, announced the arrangement to acquire 100% shares in Beadell. To safeguard the terms of loans at the phase of change in Beadell’s control, it was agreed that the outstanding receivable will remain due and payable to MACA in the absence of its consent.
MACA has today agreed to waive off the change of control clause, agreed in original loan agreement. The change relates to the following amendments effective on the completion of Beadell’s acquisition by Great Panther. The key highlights of the amendments include:
- The initial payment of $3 million and the subsequent two $1.5 million payments will be guaranteed by Great Panther.
- MACA Limited will have the right to convert a total of $15 million of the balance loan outstanding into the shares in Great Panther, subject to certain conditions.
- The provision to provide net proceeds of 30% from any debt or equity financing has been reduced to 10%.
- MACA to receive 10% of the funds of any Great Panther debt or equity issuances, and 20% of the funds in the case of exercise of existing warrants to be applied against the outstanding balance of the receivable.
Under the terms agreed, and assuming completion of the Scheme, the current total amount owing is expected to reduce from A$54.7M to A$23.2M within 12 months of the Completion Date.
With this news, MACA’s share price plunged 5.408% to trade at $0.927 on 20 November 2018 (2:04 PM AEST).
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