30th Jul 2019 13:56
(Alliance News) - Russia's Polymetal International PLC has become a Chaarat Gold Holdings Ltd shareholder, Chaarat said Tuesday, though it has experienced problems with another investor.
Chaarat completed the acquisition of the Kapan polymetallic mine in January from Polymetal for USD55 million. Of that amount, USD10 million was via a convertible loan note.
This note has now been converted by Polymetal, meaning it has been issued 14.6 million Chaarat shares, or 3.5% of the company. Polymetal will not be able to sell any shares for a year.
Chaarat Chief Executive Artem Volynets said: "We are delighted to welcome this experienced operator on to our shareholder register.
"Polymetal's decision to exchange its debt for shares in Chaarat is an endorsement of our strategy and prospects, implies a premium to our current market value, and reduces our debt levels."
Elsewhere, in April Chaarat agreed to issue USD10 million of convertible bonds from an unnamed "new investor", who increased this to USD15 million at the end of May.
However, Chaarat said they have failed to come up with the funds, and the company is now looking at "legal recourse". In the meantime, it will look to raise the funds with a new investor.
It has signed an agreement to issue USD500,000 worth of convertible bonds with a different unnamed investor.
Chaarat shares were 0.7% higher on Tuesday at a price of 30.00 pence each.
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