LONDON (Alliance News) - Paragon Diamonds Ltd on Friday said has converted a loan facility due to have been paid this week into convertible loan notes to give itself some breathing room, though its financial position remains strained.
The diamond miner said it has reclassified the GBP500,000 loan due to have been repaid by Wednesday this week as a convertible loan note of GBP638,750, with the maturity extended to May 30.
During the period from now to the maturity of the note, its lender will be able to convert the balance of the note into Paragon Diamonds shares at 5.22 pence per share or 90% of the value of three daily voluem-weighed average price calculations, whichever is the lower.
Paragon said, however, that notwithstanding the extension to the maturity on the loan note compared to the debt facility, it still have limited working capital and there remains "material uncertainty" about its financial position.
As a result, its shares will remain suspended.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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