14 Oct 2011 07:00
Trans-Siberian Gold plc
Proposed equity conversion of US$6.8 million existing debt
and
Notice of General Meeting
LONDON: 14 October 2011 - Trans-Siberian Gold plc ("TSG" or "the Company") (TSG.L) is pleased to announce proposals to strengthen its capital base by converting US$6,802,279 of existing debt into new ordinary shares of 10 pence each in the Company ("Ordinary Shares") (the "Conversion").
The Company has posted a circular to shareholders today (the "Circular") providing details of the proposed conversion of US$4,398,740 (including accrued interest) outstanding on two loan facilities provided by the Company's major shareholder UFG Private Equity Fund I, LP ("UFG") into up to 3,437,643 new Ordinary Shares at 93.4 pence per share (the "UFG Conversion") and of US$2,403,539 (including accrued interest) outstanding on a loan facility provided by the Company's other major shareholder AngloGold Ashanti Ltd ("AGA") into up to 1,874,367 new Ordinary Shares at 93.6 pence per share (the "AGA Conversion"), in each case conditional on the approval of the Company's shareholders at a General Meeting of the Company, to be held on 8 November 2011 (the "GM").
Shareholder loans
TSG reported on 3 October 2011 that UFG had notified the Company that it wished to exercise the option to convert the outstanding balance of two loan facilities provided to TSG (the "UFG Loans") into Ordinary Shares.
TSG further reported on 12 October 2011 that AGA had also notified the Company that it wished to exercise its option to convert the outstanding balance of a loan facility provided to TSG (the "AGA Loan") into Ordinary Shares.
Conversion of the UFG Loans and the AGA Loan
Subject to shareholder approval at the GM, the UFG Loans and the AGA Loan will be converted into new Ordinary Shares by applying the closing US dollar:pound sterling exchange rate on 7 November 2011 (the "Exchange Rate") and conversion prices of 93.4 pence per share in the case of the UFG Loans and 93.6 pence per share in the case of the AGA Loan.
The Exchange Rate assumed in this announcement and in the Circular is US$1.37:£1.
The conversion prices stated above are based on the respective volume weighted average closing prices of TSG's shares for the 60 trading days up to and including 28 September 2011 and 7 October 2011. As elaborated in the Circular, the Conversion will result in the issue of up to 5,312,010 new Ordinary Shares (the "Conversion Shares"), of which up to 3,437,643 shares will be issued to UFG and 1,874,367 shares to AGA respectively, in settlement of the Company's liabilities to UFG and AGA described above.
Effect of the Conversion
The Conversion Shares, when issued, will represent approximately 5.06% of TSG's enlarged issued share capital. As a result of the Conversion, UFG's and AGA's respective interests will increase to approximately 54.94% and 30.93% of the Company's shares.
As reported on 1 February 2008, the Company is not subject to The City Code on Takeovers and Mergers. The Company's principal place of business is not in the UK and a majority of its Directors are based outside the UK. Therefore the Company continues to be deemed to be outside the jurisdiction of the Code and will not be subject to the Code while its management and control remain outside the UK.
General Meeting
Shareholder approval is being sought at the GM for an increase in the Directors' authorities to allot shares and to disapply statutory pre-emption rights in relation to the Conversion.
Related Party Transactions
The UFG Conversion and AGA Conversion are deemed to be related party transactions in accordance with the AIM Rules, as UFG and AGA are both substantial shareholders.
The Directors, other than Messrs Fenner and Ryan (who are connected to UFG), having consulted with Seymour Pierce Limited, the Company's nominated adviser, consider the terms of the UFG Conversion to be fair and reasonable insofar as the Shareholders are concerned.
Further, the Directors, having again consulted with Seymour Pierce Limited, the Company's nominated adviser, consider the terms of the AGA Conversion to be fair and reasonable insofar as the Shareholders are concerned.
Ends
TSG |
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Simon Olsen | + 44 (0) 7770 484965 |
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Seymour Pierce Ltd | +44 (0) 207 107 8000 |
Stewart Dickson / David Foreman (Corporate Finance) |
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Jeremy Stephenson (Corporate Broking) |
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Copies of the Circular are available at the offices of Seymour Pierce Limited (20 Old Bailey, London EC4M 7EN) upon request and can also be downloaded from TSG's website: www.trans-siberiangold.com