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Extension of Facility Agreement
Resource Generation Limited
Registered in Australia under the Corporations Act, 2001 (Cth) with
registration number ACN: 059 950 337
ISIN: AU000000RES1
Share Code on the ASX: RES
Share Code on the JSE: RSG
(“Resource Generation” or the “Company”)
30 October 2018
ASX Announcement
Extension of Facility Agreement
Resource Generation Limited (ASX:RES) (ResGen or Company) announced to the
market on 13 September 2018 that a conditional agreement had been reached with
Noble Resources International Pte. Ltd. (Noble) to provide additional working capital
through to 31 March 2019 by way of an amendment to the facility agreement originally
entered into between Noble and Ledjadja Coal (Pty) Ltd (Ledjadja), which is the
subsidiary through which ResGen holds its interest in the Boikarabelo Coal Mine project,
in March 2014 (Facility Agreement). ResGen is the guarantor of Ledjadja's obligations
under the Facility Agreement.
One of the conditions of the revised funding arrangement with Noble was that ResGen
grant security for the obligations of itself and its subsidiary, Ledjadja, to Noble under the
Facility Agreement. The parties have now agreed that the security to be provided will be
a Share Pledge over ResGen's interest in 74% of the shares in Ledjadja, which are held
by another ResGen subsidiary, Resgen Africa Holdings Limited (RAHL). As Noble is a
Substantial Shareholder in ResGen, the grant of this security by RAHL will require
ResGen Shareholder approval (or an appropriate ASX waiver) under ASX Listing Rule
10.1.
In addition to the requirement to provide the Share Pledge, ResGen advises that the key
terms of the amendments to the Facility Agreement that have been agreed with Noble
are as follows:
. extending the current Working Capital Facility (a component of the Facility
Agreement) by an additional US$4.7m. The total commitment under the Facility
Agreement now totals US$41.9m;
Resource Generation Australia (ACN 059 950 337)
c/o Level 1, 17 Station Road, Indooroopilly, QLD, 4068
GPO Box 126, Albion QLD 4010. Phone +27 (011) 010 6310 Fax +27 (086) 539 3792
Directors: Lulamile Xate (Chairman), Robert Croll, Dr. Konji Sebati,
Colin Gilligan, Leapeetswe Molotsane, Manish Dahiya, Peter Watson www.resgen.com.au
Acting CEO: Leapeetswe Molotsane
Company secretary: Mike Meintjes
. interest rate of 10.75% pa with penalty interest applicable on a default;
. amending the first date for repayment of the Facility from 1 November 2018 to 30
June 2019;
. satisfaction of certain conditions precedent to be able to commence drawdown of
further funds under the Facility Agreement, including:
a) such certifications and opinions as Noble may require; and
b) obtaining a waiver from the ASX (either unconditionally or on conditions
satisfactory to the Lender (in its absolute discretion)) of ASX Listing Rule
10.1 in respect of the entry into, and enforcement of, the Share Pledge;
. repayment of all of the further advances made by Noble under the Facility
Agreement with accrued interest (Subsequent Advances) out of the first
advance received under any project funding arrangement (at which point the
Share Pledge must be released if required by the Project funders). The initial
US$20m plus accrued interest to be repaid in equal monthly instalments of
principal and interest to 31 December 2025;
. ResGen convening a general meeting of its Shareholders no later than 1
December 2018 to consider and, if thought fit, pass a resolution approving the
grant of the Share Pledge to Noble and any exercise of any of the powers under
the Share Pledge by Noble for the purpose of ASX Listing Rule 10.1; and
. all costs associated with negotiation and documentation to be borne by ResGen
or its subsidiaries.
In early October 2018, the Company submitted an application to ASX seeking a waiver
of ASX Listing Rule 10.1 to permit the Company, including its wholly owned subsidiary
RAHL, to grant security over its assets, including shares held by the RAHL in Ledjadja
in favour of Noble to secure the Company’s obligations under the Facility Agreement in
respect of advances of up to US$41.9 million without obtaining Shareholder approval.
The Company is now pleased to advise that the ASX has granted this waiver, subject to
certain conditions that are described below.
Approval of the Listing Rule waiver allows the Company to grant the security requested
by Noble without Shareholder approval. Assuming the other conditions precedent to
drawdown are satisfied, the Company expects to make its first drawdown of the
additional funds being advanced by Noble during November 2018. ResGen is then
planning to seek approval for the granting of the Share Pledge at the Company's Annual
General Meeting scheduled to be held on 30 November 2018. The Notice of Meeting,
which will include a report from an independent expert in relation to the proposal, is
being finalised and will be circulated to Shareholders on or about 30 October 2018.
The conditions set out in the waiver that have been granted to the Company by ASX are
that:
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. The Share Pledge include a term that if an event of default occurs and Noble
exercises its rights under the Share Pledge, neither Noble or any if its associates
can acquire any legal or beneficial interest in an asset of the Company or RAHL
in full or part satisfaction of the Company’s obligations under the Share Pledge,
or otherwise deal with the assets of the Company or RAHL without the Company
first having complied with any applicable listing rules, including listing rule 10.1,
other than as required by law or through a receiver, or a receiver or manager (or
analogous person, including without limitation an administrator or liquidator)
appointed by Noble exercising its power of sale under the Share Pledge and
selling the asset to an unrelated third party on arm’s length commercial terms
and conditions and distributing the cash proceeds to Noble in accordance with
their legal entitlements. The Company confirms that a term drafted on this basis
will be included in the Share Pledge;
. providing a summary of the material terms of the Facility Agreement and Share
Pledge in each Annual Report during the term of the Facility Agreement;
. Any variation to the terms of the Share Pledge which is not a minor change or
inconsistent with the terms of the waiver must be subject to Shareholder
approval;
. the Company and Noble must seek to discharge the Share Pledge when the
funds advanced to Ledjadja are either repaid, or if it is not discharged, seek
Shareholder approval for the continuation of the Share Pledge for any further
period; and
. that the Company releases to the Market an announcement which sets out the
terms of the waiver, including:
o the Company's plans with respect to the repayment of the funds advanced
under the Facility Agreement, and discharge of the Share Pledge, including
the timeframe within which it expects repayment and discharge to occur (as to
which, see the details regarding repayment terms and release arrangements
for the Share Pledge set out in the summary of the amendments made to the
Facility Agreement above); and
o a statement of the reasons why the Company has chosen to obtain further
funding and grant security to Noble, a Listing Rule 10.1 party, rather than a
lender that is not a Listing Rule 10.1 party, and the steps that the Board took
to satisfy itself that the transaction was being entered into is on arm’s length
terms and is fair and reasonable from the perspective of the Company’s
Shareholders.
In relation to the last item listed above, the following is noted:
. the Company requires additional working capital funding to reach Financial Close
for funding of the Project, which is not presently expected to occur before 31
March 2019;
. the Company determined that, if no further funding was obtained, it would be
likely to exhaust its current working capital funding sometime in November 2018;
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. the Company considered the available sources of funding to meet this need and
identified Noble as the only party that was in a position to make a firm
commitment within the relevant timeframe;
. the terms proposed by Noble were consistent with those previously negotiated
and agreed under the Facility Agreement with the exception of the grant of the
Share Pledge. Currently, the only security provided by the Company is a parent
guarantee for the performance of the obligations of Ledjadja and those
obligations are not secured against any specific assets of the Company or its
subsidiaries; and
. the Directors of the Company have sought and obtained an opinion on the
transaction from an Independent Expert which concludes that the grant of the
Share Pledge is fair and reasonable to Shareholders as a whole. A copy of this
Independent Expert Report will be attached to the Notice of Meeting to be
despatched to Shareholders on or about 30 October 2018.
Lulamile Xate
Chairman
For and on behalf of the Board
About Resgen:
Resource Generation Limited (Resgen) is an emerging ASX and JSE-listed energy company,
currently developing the Boikarabelo Coal Mine in South Africa’s Waterberg region. The Waterberg
accounts for around 40% of the country’s currently known coal resources. The Coal Resources
and Coal Reserves for the Boikarabelo Coal Mine, held through the operating subsidiary Ledjadja
Coal, were recently updated based upon a new mine plan and execution strategy. The Boikarabelo
Coal Resources total 995Mt and the Coal Reserves total 267Mt applying the JORC Code 2012
(ASX Announcement :23 January 2017- In accordance with Listing Rule 5.23.2 the Company
confirms that it is not aware of any new information that would impact on the Reported Coal
Resources and Coal Reserves). Stage 1 of the mine development targets saleable coal production
of 6 million tonnes per annum. Ledjadja Coal is a Black Economic Empowerment subsidiary (BEE)
operating under South Africa’s Broad-based Black Economic Empowerment Act, Section 9(5):
Codes of Good Practice.
ResGen’s primary shareholders are the Public Investment Corporation of South Africa (PIC), Noble
Group and Altius Investment Holdings.
For further information please contact:
Mike Meintjes, Company Secretary on mmeintjes@resgen.com.au or +61 413 706 143
Media enquiries:
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South Africa: Marion Brower/ Charmane Russell on +27 11 880 3924
JSE Sponsor: Deloitte & Touche Sponsor Services (Pty) Ltd
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