9th Jun 2014 09:01
LONDON (Alliance News) - Paragon Resources PLC Monday said it has agreed an unsecured GBP50,000 financing facility with shareholder Apex Utilities Ltd in a deal to provide working capital funding, as the investing company deliberates on plans for a reverse takeover.
In a statement, Paragon Resources said that it will immediately draw down GBP30,000 from the facility, with remainder available at its request. It must pay 8% a year on all drawn balances.
Paragon Resources has been classified as an investing company since March 25, 2013, but its shares have been suspended since March 26, 2014 because of its failure to make any acquisition in a reverse takeover under AIM rules. On the same date, Paragon Resources said it was in "active negotiation" and undertaking due diligence on "certain proposals" for a potential reverse takeover.
According to Paragon, the outstanding balance of the facility will automatically be converted into ordinary shares on the completion of a reverse takeover, at a conversion price equal to 83.33% of the price at which any new shares are issued. If a reverse takeover has not occurred before June 30, then the outstanding balance will be converted into shares at GBP0.0015 each.
The facility will not be repaid in cash.
If the conversion takes place before June 30, Apex will be given one warrant for every 1.25 shares received on admission. The warrants can be exercised within three years from the date they are granted at the 83.33%-related price. However, if the second scenario plays out, the conversion price will be set at GBP0.0015 per share.
Paragon Resources Chairman Simon Hunt was not immediately available for comment.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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