22nd Jul 2015 09:45
LONDON (Alliance News) - Ferrum Crescent Ltd Wednesday said it has still not received the long-overdue payment from Principle Monarchy Investments (Proprietary) Ltd despite the company assuring Ferrum earlier this month payment would be made.
Ferrum signed a memorandum of understanding with Principle in early May whereby Principle would buy a 39% stake in the Moonlight Iron Project in Limpopo Province, South Africa by subscribing for shares in the Ferrum Crescent unit that holds the project.
It was to pay a total of ZAR142 million, or USD12 million, with interim funding of ZAR2 million a month to be made until the first ZAR30 million bulk tranche was made. The memorandum of understanding would become binding once the first ZAR2 million payment is made.
Principle is a so-called black economic empowerment company, which now must be involved in investments in South Africa.
Principle was supposed to make the first ZAR2 million interim payment by June 1 and the first of three large tranche payments by December 1, however the first payment has been delayed.
Earlier in July, Ferrum informed Principle that the ZAR2 million payment was/is overdue and said Principle informed the company it had "undertaken to transfer funds to Ferrum Crescent on or around Wednesday 22 July 2015".
However, on Wednesday, Ferrum said it has still not received the payment but said it held a meeting with PRinciple, which led to a financing agreement being reached to "enable it to fulfil all of its stated immediate commitments under the bankable feasibility study financing agreement for the advancement of the project," it said in a statement.
"The board remains confident that it will conclude all financial arrangements with Principle in the coming weeks and further updates will be provided in due course as appropriate," said Ferrum Wednesday.
Ferrum shares were trading flat at 0.500 pence per share on Wednesday.
By Joshua Warner; [email protected]; @JoshAlliance
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