6th Mar 2015 16:24
LONDON (Alliance News) - African Minerals Ltd Friday said it has decided to apply to appoint joint administrators, a decision that has led nominated adviser Jefferies International Ltd to resign.
Earlier this week, African Minerals said its lender had taken control of two subsidiaries that hold the company's 75% stake in the Tonkolli iron ore project in Sierra Leone, a move that prompted the company to seek legal advice.
"The board has concluded that there is no reasonable prospect of it being able to achieve a negotiated solution with the group's secured lender and the 25% shareholder in Tonkolili Iron Ore (SL) Ltd and African Railway and Port Services (SL) Ltd," African Minerals said.
"The secured lender and the 25% shareholder in the Operating Companies are both now under the control of Shandong Iron and Steel Group," African Minerals said.
However, an administrator is yet to be appointed. African Minerals said it is "working to identify an appropriate insolvency practitioner to represent and protect the interests of the creditors and stakeholders of the company".
In addition, the company faces a race against time if it is to avoid cancellation of its shares on AIM, the London Stock Exchange's junior market, as it must appoint a nominated adviser to replace Jefferies within one month to satisfy the exchange's rules. The shares have been suspended since November 2014.
"The decision to apply to appoint administrators of AML does not directly affect the situation of the operating companies which own and operate the Tonkolili iron ore mine and related infrastructure," African Minerals said.
"The future of the operating companies, and their ability to pay creditors, obtain funding, and restart operations, is now entirely in the hands of Shandong Iron and Steel Group," African Minerals added.
By Samuel Agini; [email protected]; @samuelagini
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