20th Feb 2020 14:37
(Alliance News) - Shefa Gems Ltd on Thursday said it has entered into a convertible loan agreement for the provision of a further USD250,000 with an existing undisclosed lender.
The Israel-based gem exploration and development company said it will use the funds for working capital purposes and to fund continued development.
Under the deal, Shefa Gems said the lender will provide a further loan of USD250,000, taking the total amount extended to the company to USD600,000.
The loan, together with rolled-up interest at 5%, is convertible into Shefa Gems shares, it said, at a share price of 5 pence, at any time until the end of May. However, the company said the lender can choose to delay conversion to any time until the end of May 2021.
Shefa Gems shares were untraded in London on Thursday, last closing at 3.25p each.
If the lender decides to convert the loan, Shefa Gems said it will then hold up 9.4 million shares, representing a 4.7% stake in the firm.
Following conversion, Shefa Gems said it will grant the lender one warrant for every share received on conversion, exercisable for a period of 24 months from the date of the conversion, at a price of 10p per warrant.
"We are pleased with our valued supporters. These are lenders who wanted to increase the loan they made on January 28, amounting to USD350,000," explained Shefa Gems Chief Executive Vered Toledo.
"The additional cash resources will support the company's working capital purposes, in addition to supporting the development of our project in the Kishon Mid-Reach area," added Toledo.
By Evelina Grecenko; [email protected]
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