3rd Mar 2015 11:51
LONDON (Alliance News) - African Minerals Ltd Tuesday said its lender has taken control of two subsidiaries that holds the company's 75% stake in the Tonkolli iron ore project in Sierra Leone.
Shandong Steel Hong Kong Zengli Ltd has enforced the security that it holds over African Mineral's shares in Tonkolili Iron Ore Ltd and African Railway and Port Services Ltd as part of the company's USD250 million pre-export finance facility, which is currently in default.
"The lender has taken control of the holding companies by appointing new directors who have a voting majority, and has taken steps to take control of African Mineral's 75% shareholding in the operating companies by appointing replacement directors to those companies," said African Minerals.
It means that Shandong now own control a 100% stake in the project, with its sister company Shandong Steel Hong Kong Resources Ltd holding the other 25% interest in the operating companies involved in the Tonkolli project.
The Tonkolli iron ore project was African Minerals' sole operation.
"The company is seeking legal advice on the effectiveness of these actions, and on the responsibilities of the lender concerning African Minerals and its creditors and shareholders in enforcing its security," it said in a statement.
African Minerals has been in talks with Shandong for some time about securing a long-term financing deal, which appear to have been unsuccessful, and it was also in talks with other parties and said those talks included but were not limited to a partial sale of its stake in the project earlier in February.
By Joshua Warner; [email protected]; @JoshAlliance
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