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Firestone completes first settlement under financial-restructuring process

5th February 2013

By: Idéle Esterhuizen

  

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JOHANNESBURG (miningweekly.com) - In the first stage settlement of South African coal miner Firestone Energy’s financial restructuring, it had sold 27.15-million new convertible notes (NCNs) to Ariona Company for A$5-million in cash.

This was in accordance with an investment agreement with Ariona Company, BBY Nominees and Jaguar Funds Management.

The A$5-million comprised the additional A$600 000 in interim funding the company received and the drawdown from the original A$1-million working capital facility, which was rolled onto the new convertible notes.

The agreement also stipulated that Firestone would issue the notes to Ariona for the redemption and replacement of A$21.3-million of existing convertible notes (ENCs) and accrued interest of A$845 000.

Further, the holders of the ECNs were issued 241.146-million fully paid ordinary shares in the company in satisfaction of the balance of the interest, which had accrued on the ECNs.

As a result of the redemption of the existing convertible notes, 300-million incentive options were issued to the former holders of the ECNs.

Under the second stage of Firestone’s financial restructuring, Ariona would provide a further A$12.5-million for NCNs, which would be applied to additional working capital. The second stage was scheduled to start by February 28.

As per the restated investment agreement, from conclusion of the first stage settlement, Ariona nominated and Firestone appointed three persons to the board of Firestone – Lawson Gold chairperson and Phoenix Copper nonexecutive director David Hillier, Frankland River Olive Company acting MD and Black Star Petroleum director Oren Zohar and Eumeralla Resources and Black Star Petroleum director Jack James.

Edited by Chanel de Bruyn
Creamer Media Online Managing Editor

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