SINGAPORE - Alliance Mineral Assets on Friday (Sept 28)said the company it has proposed to merge with, Tawana Resources NL, has secured a A$20 million (S$19.7 million) secured debt facility, as well as a conditional A$20 million standby line of credit, to facilitate the merged entity's admission to the Australian Securities Exchange (ASX).
In April, Alliance and Australian-listed Tawana had proposed a merger of their companies to create a mid-tier lithium producer and simplify the ownership and operational management of the Bald Hill project in Western Australia.
Alliance is seeking a dual listing on the Singapore Exchange and the ASX, and the proposed merger is to be implemented by way of a scheme of arrangement.
Tawana has secured a A$20 million secured debt facility from Tribeca Investment Partners and other investors, which will be used to repay its existing facility, and for working capital purposes.
Separately, Alliance's board has also consented for Tawana to secure a conditional A$20 million standby line of credit on behalf of the merged group.
The standby credit facility is conditional on the scheme of arrangement being implemented, Alliance receiving conditional ASX listing approval and entry into formal documentation, with draw down subject to customary conditions, the company said.
It added that the scheme will be implemented in November this year, subject to the certain conditions being satisfied.
The standby line of credit has a term of 21 months, with repayment to be made by July 1, 2020. The standby rate is 3 per cent on undrawn funds, with an interest rate of Libor plus 13 per cent per annum payable on drawn down funds.
In addition, there is a redemption premium of 2 per cent on any outstanding amount repaid at maturity, and an early call premium of 5 per cent on any amounts repaid prior to maturity.
Alliance also noted that the merged group shall not pay dividends or undertake capital reductions.
The counter has requested the lifting of its trading halt and was trading 9.4 per cent higher to $0.29 apiece as at 9.01am on Friday, after the release of this announcement.