LONDON (Alliance News) - Tengri Resources shares fell on Wednesday after it said the proposed deal to sell its exploration and development operations in Talas in the Kyrgyz Republic will not be completed until at least the end of this month.
Tengri shares were down 26% to 1.29 pence per share on Wednesday morning.
Tengri is in the process of selling the two subsidiaries that own the operations within the Talas area to Socagest SA. Those two subsidiaries are Kami Associates Ltd and Tatianna Ltd, and they hold Tengri's Andash mining licence and the Taldybulak licence.
Socagest is paying USD6.0 million in total and has already paid a USD1.0 million deposit. The deal has cleared all of the necessary hurdles and is only subject to the remaining USD5.0 million being paid by Socagest to Tengri.
Tengri on Wednesday said Socagest has asked to defer the payment schedule, but has also proposed numerous instalments over the rest of this month in an attempt to complete the deal on the last day of May, and Tengri has accepted the proposed schedule.
Under the new schedule, Socagest will make its first payment on Wednesday totalling USD1.5 million. Tengri Resources did not confirm whether or not that has been received already.
Socagest will then pay instalments of USD500,000 each on Thursday and Friday this week, followed by further tranches of the same amount on May 17, 23 and 26.
The final payment of USD1.0 million is due to be paid on May 31, which if paid would make the deal unconditional and satisfied.
Tengri is left with no significant assets after the transaction, which was approved by shareholders earlier this month, as the company tries to find cheaper opportunities that can deliver near-term production.
Part of the proceeds of the sale will be used to settle the outstanding liabilities of the subsidiaries being sold, roughly around GBP869,976, whilst another USD4.7 million will be used to pay off Tengri's loan note holders - leaving Tengri with only USD600,000, excluding expenses, to begin building a new company, suggesting further funds may be needed shortly.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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