Alba Dilution - from the AIM readmission Document1 Dec 2020 11:58
Effectively Alba are losing their percentage at Base Rate levels - currently 0.1% percent a year - brilliant arrangement - NOT!
12.2.5 Investment Agreement dated 15 September 2014
On 15 September 2014, the Company entered into an investment agreement with HHDL and a number of investors (the “HHDL Investment Agreement”) in respect of HHDL. This agreement set out the terms and conditions on which the parties operated HHDL, as holder of PEDL137 and PEDL246 (together the “Horse Hill Licences”).
Under the terms of the HHDL Investment Agreement, the Company acquired a 20% interest in HHDL, with the other investors receiving the remaining 80% of shares between them.
Pursuant to the HHDL Investment Agreement, the Company agreed to subscribe for 200 ordinary shares in the capital of HHDL at a subscription price of £6,000 per share (£1,200,000 in aggregate), representing 20% of the entire issued share capital of HHDL. On completion of the HHDL Investment Agreement, the Company, together with the other HHDL Investors, were required to have paid up 10% of the subscription price in respect of the shares (being £120,000). The remainder of the subscription monies are to be paid by HHDL (and the other HHDL Investors) as are required pursuant to cash calls made against HHDL under the Magellan Agreement.
In the event that HHDL requires further working capital, such working capital is to be provided by all of the shareholders of HHDL by way of loan pro rata in proportion to their shareholdings. Unless determined otherwise, the loans made will accrue interest at a rate equal to the Bank of England base rate from time to time, be repayable on the date falling 30 business days’ after HHDL’s financial year end following such loan being made and all repayments are to be made on a pro rata basis between shareholders. If a shareholder does not provide finance as set out above, each other shareholder shall be issued new ordinary shares in the capital of HHDL based on the following formula:
Number of shares = shareholder loan contributed by the shareholder/£6,000.
The shares issued will be fully paid up out of the available reserves of HHDL save that if HHDL does not have sufficient available reserves, the relevant shareholders shall be entitled to subscribe for the anti-dilution shares at par value.
Customary (but non-extensive) warranties were given to the Company by HHDL and Angus Resources (the sole shareholder of HHDL prior to the HHDL Investment Agreement being entered into. The HHDL Investment Agreement can only be varied by HHDL Investors’ holding at least 50% of the share capital between them. The HHDL Investment Agreement is governed by the laws of England and Wales.
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