23rd Oct 2019 11:37
(Alliance News) - Bushveld Minerals Ltd on Wednesday said it has agreed an early settlement of the Yellow Dragon Holdings' earn-out payable under the Bushveld Vametco Ltd acquisition deal.
The vanadium producer explained that the early settlement is in line with its strategy to simplify its balance sheet and corporate structure while taking into account current market dynamics.
As part of the Vametco acquisition terms, Bushveld Minerals agreed to make two deferred payments of USD600,000 each to Yellow Dragon, payable following publication of the accounts for Vametco Holdings Ltd for 2018 and 2019. A final payment will be made on publication of the Vametco Holdings Ltd accounts for 2020, Bushveld said.
The company said it has to-date paid the first of the two USD600,000 payments, following which the two parties agreed on an early settlement of full and final earn out of USD13.5 million.
Bushveld said a cash component payment totalling USD3.0 million will be paid, in addition to USD10.5 million payable in 33.9 million Bushveld shares, issued at a price of 24 pence.
The stock was trading 3.0% lower on Wednesday in London at 26.69p apiece, giving Bushveld a market capitalisation of GBP298.7 million.
The shares issued to Yellow Dragon are subject to a six-month lock-in arrangement and a further six-month orderly market arrangement, Bushveld said, which are subject to certain exceptions.
Following the admission, Bushveld will have 1.15 billion shares overall.
"We are pleased to have agreed terms with Yellow Dragon for the early settlement of the earn-out under our 2017 Bushveld Vametco acquisition terms. This represents the final leg of our balance sheet simplification exercise, which we are pleased to coincide with the completion of the Vanchem acquisition, which is expected to complete shortly," said Bushveld Chief Executive Fortune Mojapelo.
By Evelina Grecenko; [email protected]
Copyright 2019 Alliance News Limited. All Rights Reserved.
Related Shares:
Bushveld Minerals