16th May 2016 16:56
LONDON (Alliance News) - Vast Resources PLC said Monday it has entered into a bridge loan note with Darwin Capital Ltd for up to GBP1 million to support its short-term working capital.
It has agreed an initial note of GBP650,000 which will be used for ongoing working capital requirements, which was issued Monday.
The note will mature on two dates, 50% will fall due on July 10, and the outstanding amount on either October 10 or earlier upon acceleration or early redemption. Interest will accrue at a rate of 20% per year.
Vast Resources said if it fails to repay Darwin on either of the maturity dates the principal amount of the loan will be increased to 120%. If it defaults and the maturity date or dates are extended, then Darwin will have the right to convert all of the then outstanding amount and interest into shares in Vast.
"The company has initiated several capital projects to increase both the capacity and efficiencies at the Manaila operation. The rejection of the Crede Tranche 2 financing has put pressure on the company's working capital requirements and the Darwin funding has been arranged as a short term bridging facility to help the company maintain the operational momentum that it has built over the past months," said Chief Executive Officer Roy Pitchford in a statement.
Shares in Vast Resources closed down 3.8% at 0.327 pence Monday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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