LIONGOLD CORP LTD PROPOSED ISSUE OF CONVERTIBLE BONDS

Transcription

1 LIONGOLD CORP LTD PROPOSED ISSUE OF CONVERTIBLE BONDS 1. INTRODUCTION The Board of Directors of Liongold Corp Ltd (the Company ) wishes to announce that the Company had on 27 March 2012 entered into a subscription agreement (the Subscription Agreement ) for the issue of Convertible Bonds (as defined below) with DMG & Partners Securities Pte Ltd, which has been appointed as the manager (the "Manager") of the Offering (as defined below). Under the terms of the Subscription Agreement, the Company has agreed to issue, and the Manager has agreed to procure, on a best efforts basis, subscribers to subscribe for, an aggregate of up to US$30.0 million in principal amount of 9.0% convertible bonds due 2015 at an issue price of 100% of the principal amount of the convertible bonds (the Convertible Bonds ). The offering of shall be referred to as the Offering. Subject to the applicable terms and conditions of (the Conditions ), the Convertible Bonds are convertible into new ordinary shares (the Shares ) in the capital of the Company (the Conversion Shares ). 2. PRINCIPLE TERMS OF THE CONVERTIBLE BONDS The Offering Principal Size of the Offering : Up to US$30.0 million in aggregate principal amount of Convertible Bonds. Maturity Date : 36 months after the date of issuance (the Issue Date ) of the Convertible Bonds ( Maturity Date ). Issue Price : 100% of the principal amount of. Interest Rate : The Convertible Bonds will bear interest at the rate of 9.0% per annum. Method of Issue : The Convertible Bonds are proposed to be placed to institutional and/or accredited or other investors pursuant to exemptions invoked under Sections 274 and 275 of the Securities and Futures Act (Cap. 289) of Singapore (the SFA ). Conversion Period : The conversion right attaching to any Convertible Bond may be exercised, at the option of the holder of the Convertible Bond (the Bondholder ), at any time on or after the 30 th calendar day after the Issue Date and up to the close of business on the Maturity Date. If the Maturity Date is not a business day, then the period for the exercise of the conversion right by the Bondholder shall end on the immediately following business day. Conversion Price : The price at which the Conversion Shares will be issued upon conversion, as adjusted from time to time (the Conversion Price ), will initially be the higher of: i) S$0.964 (being a price equivalent to 10% discount to the weighted average price of the Shares for trades done on the SGX-ST for the full market day on which the Subscription Agreement was signed); or

2 ii) 120% of the average of the weighted average price of the Shares for trades done on the SGX-ST for the twenty (20) consecutive trading days after the Issue Date; and provided further that in no event shall the initial Conversion Price be higher than S$1.158 per Conversion Share. The Conversion Price will be subject to adjustment in the manner provided in the Conditions. Early Redemption Amount Redemption at the Option of the Company Conversion for Change of Control : For each Convertible Bond, 100% of its principal amount. : On or at any time after the date which is 24 months from the Issue Date but not less than 7 business days prior to the Maturity Date, the Company may, having given not less than 30 nor more than 60 days notice to the Bondholders (which notice will be irrevocable), redeem all of (being US$250,000 in principal amount or an integral multiple thereof), provided that no such redemption may be made unless the Closing Price (as defined in the Conditions) of the Shares for each of the 20 consecutive Trading Days (as defined in the Conditions), the last day of which period occurs no more than 30 Trading Days prior to the date on which notice of such redemption is given, was at least 150% of the Conversion Price in effect on such Trading Day. Following the occurrence of a Change of Control Event, each Bondholder will have the right, at such Bondholder s option, to exercise the conversion right attaching to any Convertible Bond. A Change of Control Event means: i) an offer which is made to all shareholders of the Company (the Shareholders ) to acquire the whole or any part of the issued share capital or the Company; ii) iii) any person proposing a scheme of arrangement with regard to such acquisition, and (such offer or scheme having become or been declared unconditional in all respects) more than 50% of the voting rights of the issued share capital of the Company have or will become unconditionally vested in the offeror and/or its associates; or an event which has a like or similar effect. Redemption for Change of Control Redemption on Maturity : In the event a Change of Control Event occurs, each Bondholder shall have the right, at such Bondholder s option, to require the Company to redeem in whole but not in part the Bondholder s Convertible Bonds at 100% of a Bond s principal amount together with accrued interest (calculated up to but excluding the date of redemption) at the date fixed for such redemption. : Unless redeemed, converted or purchased and cancelled as provided in the Conditions, the Company will redeem each Convertible Bond at 100%. of its principal amount together with all accrued interest (calculated up to but excluding the Maturity Date). Governing Law : The laws of Singapore.

3 3. CONDITIONS PRECEDENT The issue of is conditional upon: i) the approval in-principle of the Singapore Exchange Securities Trading Limited (the SGX-ST ) for the listing and quotation of the Conversion Shares being obtained and not having been revoked as of the completion date; ii) the Company confirming that it shall not be required to obtain approval in general meeting for the issuance of or the allotment and issuance of the Conversion Shares; iii) the Company confirming that the takeover bid for 100% of the issued and paid-up share capital of Signature Metals Limited ( SML, and such takeover bid, the Takeover Offer ) has been declared unconditional; and iv) the issue of on the Issue Date not being prohibited by (a) any statute, order, rule or regulation promulgated after the date of the Subscription Agreement by any legislative executive or regulatory body or authority of Singapore or Bermuda which is applicable to the Company or (b) any injunction or other orders issued by any court of competent jurisdiction On completion, the Company and a subscriber of (as identified by the Manager and hereinafter referred to as the Chargee ) shall enter into a share charge in the agreed form pursuant to which the Company shall charge such number of ordinary shares legally and beneficially owned by the Company in African Stellar (West Africa) LTD ( African Stellar ), constituting 51% of the entire issued shares of African Stellar to the Chargee. 4. STATUS OF THE CONVERTIBLE BONDS AND THE CONVERSION SHARES Based on the maximum Conversion Price of S$1.158 and assuming no adjustments thereto, and full subscription of, the number of Conversion Shares to be allotted and issued by the Company pursuant to the full conversion of is 32,642,487 (based on an exchange rate of US$1.00 = S$1.26). The 32,642,487 Conversion Shares represent approximately 4.46% of the existing issued share capital of the Company (excluding treasury shares) as at the date of this Announcement. Based on the minimum Conversion Price of S$0.964 and assuming no adjustments thereto, and full subscription of, the number of Conversion Shares to be allotted and issued by the Company pursuant to the full conversion of is 39,211,618 (based on an exchange rate of US$1.00 = S$1.26). The 39,211,618 Conversion Shares represent approximately 5.36% of the existing issued share capital of the Company (excluding treasury shares) as at the date of this Announcement. The Conversion Shares, when allotted and issued by the Company, will rank pari passu in all respects with the Shares, except for any dividends, rights, allotments or other distributions, the record date for which is prior to the date of issue of the Conversion Shares. The Convertible Bonds will constitute direct, senior, unsubordinated, unconditional and unsecured obligations of the Company, and will rank pari passu and rateably and without any preference or priority among themselves. The payment obligations of the Company under the Convertible Bonds shall, save for such exceptions as may be provided by mandatory provisions of applicable law, at all times rank at least equally with all of the Company s other present and future direct, senior, unsubordinated, unconditional and unsecured obligations.

4 The Conversion Bonds will be issued pursuant to the general share issue mandate granted by the Shareholders on 30 July The Company will apply to the SGX-ST for the admission to and listing and quotation of the Conversion Shares on the Mainboard of the SGX-ST, and will make the necessary announcements upon receipt of the approval in-principle from the SGX-ST for the listing and quotation of the Conversion Shares. 5. USE OF PROCEEDS Pursuant to the Offering, the Company intends to raise gross proceeds of up to approximately US$30.0 million. The net proceeds (after deducting the estimated issue expenses relating to the Offering) (the Net Proceeds ) will be used in the following proportions: Use of Proceeds Percentage Allocation Finance the repayment of the borrowings 35% General working capital requirements of the Group (including the operations of SML) Mergers and acquisitions, joint ventures or strategic alliances by the Group as and when opportunity arises 20% 45% The Company will make an announcement on the use of the Net Proceeds as and when such proceeds are materially disbursed, including whether the use is in accordance with the intended use as announced. Where there is any material deviation from the stated use of proceeds, the Company will announce the reasons for such deviation. Pending the deployment of the Net Proceeds, such proceeds may be deposited with banks or financial institutions, invested in short-term money market instruments or marketable securities, and/or used for any other purpose on a short-term basis, as the Directors may, in their absolute discretion, deem fit from time to time. 6. FINANCIAL EFFECTS For purposes of illustration only, the proforma financial effects of the Offering (excluding transaction costs), based on the last published unaudited consolidated financial statements of the Company and its subsidiaries (collectively, the Group ) as at 31 December 2011 and the maximum Conversion Price of S$1.158 and the minimum Conversion Price of S$0.964 (and assuming no adjustments thereto), are as follows. The exchange rate used for purpose of the computations below is US$1.00 = S$1.26. (a) Share Capital Number of Shares ( 000) Number of Shares ( 000) Conversion Price (S$) Issued and paid up share capital (excluding treasury shares) Number of Conversion Shares to be issued upon conversion of Issued and paid up share capital after conversion of 731,344, ,344,429 32,642,487 39,211, ,986, ,556,047

5 (b) Net Asset Value ( NAV ) Conversion Price (S$) NAV based on last published unaudited accounts as at 31 December 2011 Estimated issue expenses associated with equity portion of Adjusted NAV after the issue of the Convertible Bonds but before any conversion NAV per Share before the issuance of the Convertible Bonds (SG cents) NAV per Share after the issuance of the Convertible Bonds but before the conversion of the Convertible Bonds (SG cents) Adjusted NAV after the issue of the Convertible Bonds and after conversion of the Convertible Bonds NAV per Share after the issuance of the Convertible Bonds and after conversion of (SG cents) 44,936,000 44,936, ,936,000 44,936, ,263,000 81,263, (c) Gearing Conversion Price (S$) Net borrowings as reported 56,061,000 56,061,000 Net proceeds from issuance of (36,327,000) (36,327,000) Issuance of Estimated issue expenses associated with debt portion of issued 37,800,000 (1,473,000) 37,800,000 (1,473,000) Adjusted net borrowing after the issuance of the Convertible Bonds but before any conversion of 56,061,000 56,061,000 Total equity as reported 43,616,000 43,616,000 Estimated issue expenses associated with equity portion of issued Adjusted total equity after the issuance of the Convertible Bonds but before any conversion of ,616,000 43,616,000 Net debt to equity as reported 128.5% 128.5%

6 Net debt to equity after issuance of the Convertible Bonds but before conversion of the Convertible Bonds Adjusted net borrowing assuming full conversion of Adjusted net equity assuming full conversion of the Convertible Bonds Net debt to equity after issuance of the Convertible Bonds and after conversion of the Convertible Bonds 128.5% 128.5% 19,734,000 19,734,000 79,943,000 79,943, % 24.7% (d) Earnings per Share The interest expense in respect of prior to any conversion will be at the effective rate of 9.0% each year. However, it is not possible to quantify the effects of the issue of on the earnings of the Group until the proceeds from the issue of the Convertible Bonds have been deployed. 7. INTERESTS OF DIRECTORS AND SUBSTANTIAL SHAREHOLDERS None of the Directors and substantial shareholders of the Company has any interest, direct or indirect, in the Offering (other than by virtue of their respective shareholder interests in the Company). 8. OTHER INFORMATION This Announcement does not constitute an offer to sell, or the solicitation of an offer to buy, any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful. BY ORDER OF THE BOARD Wong Choy Yin Executive Director LionGold Corp Ltd 28 March 2012