Namibian Minerals’ major shareholder, LL Mining Corporation BV, has provided a $3-million (U.S.) bridging loan facility to the company. The company has finalized the terms of a rescheduling agreement with its senior lenders. The company is also finalizing terms to reschedule repayment of convertible debentures issued in March and April, 2001, and repayment to LL Mining of an earlier $2.6-million (U.S.) loan made to the company, as well as an agreement with LL Mining for the provision of a $10-million (U.S.) loan facility, which replaces the $3-million (U.S.) bridging loan. In addition, there are certain board and senior management changes, which are to take immediate effect.
Board changes
The board and management changes follow LL Mining’s requirements for increased board and management representation following its $15-million (U.S.) investment in the company in March this year, and given LL Mining’s provision of a loan of $2.6-million (U.S.) in June, 2001, the $3-million (U.S.) bridging loan described below, and the provision of a further loan of $10-million (U.S.). The board and management changes are as follows:
Alastair Holberton has resigned from his position as chairman, chief executive officer and director;
Arye Barboy, a director representing the Leviev Group, has been appointed chairman;
the board now comprises six members and will be restructured in accordance with the requirements of the $10-million (U.S.) facility described below;
Eli Nefussy, currently chief financial officer, has been appointed interim CEO; and
Peter Looijen will continue as manager of operations.
“I am confident that the Leviev Group has the vision and expertise to take forward the company’s prospective concessions, innovative technology and talented people,” said Mr. Holberton.
Mr. Barboy, aged 38, is the chief executive officer of LL Mining Corporation, a member of the Tel Aviv based Leviev Group of companies. He has been the director of international investment for the Leviev Group since 1999. His previous positions include partner and finance director for United Project Services in Israel and project manager for Batepro in South Africa. He holds a BA in industrial management and an MA in operations research.
“In spite of the company’s extremely difficult year, the company’s recovery program is being achieved. The extraordinary effort of the company’s management and its employees has allowed the recovery of the company to rebuild its strength to what it was before the accident early this year. Production is steadily improving, the new Nam 2 technology is working, exploration is yielding positive results, the insurance claim was settled and a number of cost-saving initiatives have been implemented. We thank Alastair Holberton for his enormous commitment during the year and we will continue to build the company to become a leading marine diamond producer,” said Mr. Barboy.
Rescheduling of indebtedness to senior lenders
The company has finalized the terms of a rescheduling agreement with its senior lenders in terms of which:
a capital repayment standstill will apply until March 31, 2003. During this standstill period the company will continue to service interest;
capital repayments are to be made monthly from April 1, 2003, to Dec. 31, 2008, with an acceleration of repayment from free cash flow generated in each quarter provided the company has a cash reserve of $5-million (U.S.);
as security the senior lenders require existing security under their existing loans to be extended for the benefit of all the senior lenders, shares and intercompany claims of certain subsidiaries of the company to be charged in favour of the senior lenders, and a charge over the launch and recovery system aboard the M.V. Kovambo;
senior lenders are to be paid a rescheduling fee of 1 per cent of the outstanding loans by way of allotment of common shares in the company based on a price of 22 U.S. cents per common share (approximately 2.25 million common shares); and
the agreement includes being subject to the $10-million (U.S.) loan from LL Mining being unconditional, rescheduling of the payment in respect of convertible debentures that were issued by the company in March and April this year, a rescheduling of the payment terms in respect of the $2.6-million (U.S.) loan from LL Mining, and the payment of the rescheduling fee in shares.
Additional financing
$3-million (U.S.) bridging loan
LL Mining has provided the company with bridging finance of $3-million (U.S.) for continuing working capital requirements, pending finalization of the rescheduling agreement its senior lenders. The loan is repayable on demand. LL Mining has been granted security in respect of such bridging finance, which includes a charge over certain equipment on board the M.V. Zacharias and the M.V. Kovambo, an assignment of the company’s charter agreement over the M.V. Zacharias and a mortgage bond over real estate property in Namibia. The terms of the loan were considered by a committee of directors, independent of LL Mining. The independent members of the board were of the opinion that the $3-million (U.S.) loan facility was on reasonable commercial terms that are not less advantageous to the company that if such bridging loan facility were obtained from a person or company dealing at arm’s length with the company. The independent members of the board were further of the opinion that the company is in serious financial difficulties, the transaction is designed to improve the financial position of the company, and the terms of the transaction are reasonable in the circumstances of the company. The independent directors accordingly recommended that the board of directors approve the company entering into the bridging loan facility. The company has drawn down $2-million (U.S.) under the bridging finance loan facility.
Shareholders meeting
As common shares are to be issuable as a result of the aforesaid proposed transactions in excess of the maximum amounts prescribed by Nasdaq and Toronto Stock Exchange regulations. A shareholders meeting will be held on Jan. 17, 2002, to obtain shareholders approval for the issuance of common shares arising from the above transactions.
None of the Nasdaq National Market, the Toronto Stock Exchange nor the Namibian Stock Exchange has reviewed the information contained herein and does not accept responsibility for the adequacy or the accuracy of the above.
WARNING: The company relies upon litigation protection for “forward-looking” statements.
