Iron ore junior Territory Resources has entered a non-binding agreement with its major shareholder, Hong Kong commodities trading house Noble Group, for a $20.9 million debt to equity conversion.
Iron ore junior Territory Resources has entered a non-binding agreement with its major shareholder, Hong Kong commodities trading house Noble Group, for a $20.9 million debt to equity conversion.
Iron ore junior Territory Resources has entered a non-binding agreement with its major shareholder, Hong Kong commodities trading house Noble Group, for a $20.9 million debt to equity conversion.
Territory has offered a conversion price of 35 cents per share, representing a 10 per cent discount to the 30-day volume weighted average price up to February 1.
The debt conversion is subject to a binding agreement being reached with Noble, and shareholder approval.
If successful, the debt conversion would result in Territory issuing Noble 66.7 million shares, increasing its holdings from 28.9 per cent to 43.24 per cent.
Territory also announced it would offer a $2.5 million share placement at 31.5 cents per share to its other major shareholder, Austrian-based commodities trading house DCM Decometal GMBH.
DCM currently holds 10.6 per cent of Territory's shares.
Proceeds of the placement would be applied to general working capital and to fund exploration programs.
In addition, Territory will offer a share purchase plan to its shareholders, giving them the opportunity to purchase up to $10,000 worth of ordinary Territory shares at 30 cents per share, conditional on completion of the debt conversion.
Territory Resources chairman Andrew Simpson said the debt conversion was an important step in the repositioning of Territory Resources.
"Over the past two years we have engineered an operational turnaround which has enabled us to significantly reduce our core debt and extend our resource and reserve base," Mr Simpson said.
"We will be ready to move to a new level of growth and development as a result of these transformational transactions.
"This growth scenario will specifically concentrate on a much more aggressive exploration and product beneficiation program to ensure the maximised use of the excellent infrastructure assets under the company's control, and also provide the company with the opportunity to invest in alternative projects."