How Troy’s (ASX:TRY) massive recapitalisation plan will change its structure - Kalkine Media

Highlights

• Troy Resources’ massive recapitalisation program would see a substantial change in the Company’s share capital and shareholding.
• Troy is expecting to convert nearly AU$20 million of its debts into equity and raise approximately AU$7 million in cash.
• Post the transactions, Asian Investment Management Services Ltd (AIMS) will become Troy’s largest shareholder with 627 million shares.

In a major overhaul of the Company’s share capital, Troy Resources Limited (ASX:TRY) in January announced a recapitalisation plan to generate substantial cash and convert its existing debts into equity. The recapitalisation will lead to equity dilution but will save a significant sum in interests to service the debts and loans of the Company.

Related read: A 360-degree overview of Troy Resources’ (ASX:TRY) operations at Karouni Project

The management expects the recapitalisation will allow Troy to progress its development plans on Smarts Underground, and if the rights issue manage to fetch sufficient funds, it would help the Company to explore the underexplored but highly prospective ground position at Karouni.

Recapitalisation plans

Troy’s recapitalisation plan, which has already been set into motion, is expected to raise nearly AU$7.2 million in cash and reduce nearly AU$20.7 million of debts. Soon after the announcement, the Company issued 42 million shares @ 0.022 as part of Tranche 1 of the recapitalisation program and raised AU$0.93 million.

Troy is also employing Convertible Note facilities alongside the placement of new shares to raise the aforementioned funds. The company intends to offer all shareholders an opportunity to participate in the rights issue. The rights issue will offer 1 share for each share held at the same price of the placement.

Related read: Here’s how Troy Resources’ (ASX:TRY) recapitalisation plan looks like

New shareholding pattern

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Following the recapitalisation, Asian Investment Management Services Ltd (AIMS) will become the largest shareholder of Troy owning 627 million shares. The investment firm will convert all of its gold loans into equity in two stages.

Troy’s largest trade creditor Exploservice Guyana Inc has agreed to convert nearly AU$4.6 million into equity and will receive approximately 209 million shares @ 0.022. The amount is nearly 40% of the total amount owed by Troy. Further to this announcement, Exploservice has agreed to convert debt of AU$7.1 million into 323 million shares.

Troy’s existing largest shareholder M&G Plc has offered to subscribe 122 million shares, raising approximately AU$2.7 millionwhile Ruffer LLP, currently the second largest shareholder, will hold 68 million shares. The transaction will raise nearly AU$1.5 million in proceeds.

Related read: What is Troy (ASX:TRY) doing to fast-tack development of Smarts Underground?

A London-based investment service firm, RiverFort Global Capital, has given confirmation to subscribe 23 million shares, and in due process, will help Troy to raise AU$0.5 million. Along with this, RIverFort will also provide Troy with a convertible note funding of up to AU$5 million. 

Data source: Company update, 2 May 2022

Troy is firing on all cylinders to improve its financials and advance the Karouni Gold Project. The Company recently signed a definitive agreement with a Brazilian mining company to divest its non-core assets in Brazil. The deal is expected to fetch around AU$4 million in proceeds.

Good read: Troy Resources (ASX:TRY) gets a boost through new moves