RNS Number : 9028B
Pan Pacific Aggregates PLC
03 November 2009
PAN PACIFIC AGGREGATES PLC
VARIATION AND REDEMPTION OF OUTSTANDING LOAN NOTES
AND OPERATIONAL UPDATE
The Board of Pan Pacific Aggregates plc (the "Company") announces that, following the announcement on 27 March 2009, the Company on 3 November 2009 entered into a deed of variation with RAB Special Situations (Master) Fund Limited ("RAB"), pursuant to which the terms of the secured convertible loan notes issued by the Company to RAB (the "Loan Notes") have been further amended (the "Variation").
The Variation allows the Company to redeem £1,890,019 of the outstanding principal loan note balance (including capitalised interest) of £5,131,234 by the payment of £890,019 (effective as at 4 November 2009) and a deferred cash payment representing the net proceeds from the sale of the Company's Wood Bay property. The remaining principal loan note balance of £3,241,215 will be converted into 53,718,795 new ordinary shares of £0.001 each ("New Ordinary Shares") at an effective price of 6.03 pence per share. RAB has agreed with the Company that the redemption and conversion will take place on 4 November 2009. The principal terms of the Variation are set out below under the heading "Variation of Loan Note Terms and Redemption".
The closing mid-market price of the Company's shares on 2 November 2009, being the business day prior to the Variation, was 0.71 pence.
The New Ordinary Shares will be allotted on conversion under existing authorities to issue and allot shares.
Application has been made to the London Stock Exchange for the 53,718,795 New Ordinary Shares to be admitted to trading on AIM and it is expected that dealings will commence on or around 9 November 2009.
Following such conversion, the enlarged issued share capital of the Company will be 1,403,981,242 ordinary shares of £0.001 each.
William Voaden, Managing Director commented:
"We are delighted to be able to redeem the outstanding RAB loan notes. Whilst there is much work still to be done, overall we have a much stronger Company following the recent restructuring. Our first blast was carried out on 21 October 2009 and we remain on schedule for the completion of our pioneering and development work at the quarry."
3 November 2009
For further information, please see the Company's website (www.panagg.com) or contact:
Pan Pacific Aggregates plc Tel: +44 (0) 20 7096 9580
William Voaden
Dowgate Capital Advisers Ltd Tel: +44 (0) 20 7492 4777
Aaron Smyth
VSA Capital Limited Tel: +44 (0) 20 7096 9589
Paul Backhouse
Lothbury Financial Limited Tel: +44 (0) 20 7011 9411
Michael Padley / Libby Moss
1. BACKGROUND TO AND REASONS FOR THE VARIATION
On 27 March 2009, the Company entered into a deed of variation with RAB, pursuant to which the terms of the Loan Notes issued by the Company to RAB were varied so that, subject to certain conditions including the Company completing a minimum equity fundraising of £2,500,000 following the variation becoming effective, the Company would be entitled at any time prior to 31 March 2010 to redeem the Loan Notes in full by paying to RAB the amount of £750,000 (in addition to the net proceeds from the sale of Wood Bay) and converting the remaining principal amount outstanding under the Loan Notes into such number of shares as will result in RAB having a fully diluted interest (including their then existing holding) in the amount of 10 per cent. of the Company's issued ordinary share capital, immediately following such conversion. Interest accrued up to the date of the variation becoming effective was to be capitalised, following which interest would accrue at 6 per cent per annum on the principal amount of the Loan Notes. The above variation became effective on 22 May 2009.
As at 3 November 2009, the principal amount of the Loan Notes outstanding was £5,131,234 which includes accrued capitalised interest of £1,381,234.
2. VARIATION OF LOAN NOTE TERMS AND REDEMPTION
On 3 November 2009, the Company entered into the Variation agreement with RAB whereby it was agreed that the Loan Notes will be redeemed in full on 4 November 2009, on the following principal terms:
£1,890,019 IN PRINCIPAL AMOUNT OF THE LOAN NOTES WILL BE REDEEMED BY PAYMENT OF £890,019.43 AND IN CONSIDERATION FOR THE PAYMENT BY THE COMPANY TO RAB OF THE PROCEEDS OF SALE OF ITS WOOD BAY PROPERTY. THE PROPERTY IS CURRENTLY BEING MARKETED BY THE COMPANY;
THE BALANCE OF THE PRINCIPAL AMOUNT (INCLUDING CAPITALISED INTEREST) OF THE LOAN NOTES (IN THE AMOUNT OF £3,241,215) WILL BE CONVERTED INTO 53,718,795 ORDINARY SHARES OF £0.001 EACH IN THE COMPANY AT A PRICE OF 6.03P PER SHARE; AND
PAYMENT OF OUTSTANDING INTEREST ON THE LOAN NOTES IN THE AMOUNT OF £140,019 WILL BE WAIVED BY RAB.
The Variation agreement between the Company and RAB reflects minor amendments to the mechanics for redemption and conversion of the Loan Notes, although the substantial terms remain the same as agreed on 27 March 2009.
Following the above conversion, RAB will hold 53,718,795 ordinary shares (representing approximately 3.83 per cent. of the enlarged issued share capital of the Company) and warrants to subscribe up to 16,121,497 ordinary shares.
The Directors believe the Variation allows the Company to discharge the outstanding Loan Notes in an efficient manner and, in doing so, will release the Company from any security granted in favour of RAB other than over the Wood Bay property and strengthens its balance sheet position.
3. RELATED PARTY TRANSACTION
RAB, together with its respective underlying funds, has been deemed to be a substantial shareholder and a related party for the purposes of the Variation. The Variation is a Related Party Transaction for the purposes of the AIM Rules.
The Directors consider, having consulted with Dowgate Capital Advisers Limited, the Company's Nominated Adviser, that the terms of the Variation, a Related Party Transaction with RAB, are fair and reasonable insofar as the Company's shareholders are concerned.
4. OPERATIONAL UPDATE
Considerable changes have been initiated in the last six months to restructure the Company and bring Pumptown into production. We have now moved equipment into the quarry and begun blasting and pioneering work to access the top of the quarry to create a cost efficient operation. The development work is on schedule for our programmed production. Our target remains to achieve initial sales from the quarry by year end.
The redemption of Loan Notes outstanding is expected to lower interest costs and add to earnings per share. The Directors remain committed to pursuing value for the benefit of all shareholders.
* ENDS **
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