SINGAPORE - Suspended Catalist-listed Indonesian coal miner Resources Prima Group said on Monday night (Aug 6) that it has obtained a convertible loan of $2 million from Ang Liang Kim, a substantial shareholder of the company.
The group has been operating under severe cash flow constraints since its main operating subsidiary PT Rinjani Kartanegara entered bankruptcy in October last year, and had said in June that it was in advanced discussions with a potential investor to provide financing to the company.
The transactions contemplated in this investment agreement are beneficial to the company and the group due to the availability of financing, which will strengthen the current financial position of the company and the group significantly and allow the shareholders to participate in the recovery of the company if they so elect to do so, said Resources Prima on Monday.
"The support from its shareholders, in particular the investor, during this period is important to the continuity of the company. The company will use the available financing from the transactions contemplated in the investment agreement as general working capital," it added.
The $2 million convertible loan will include a $500,000 sum placed in escrow, pending the execution of the definitive agreement.
Subject to approvals, the group will convert the full amount of the drawn down convertible loan of up to $2 million into up to two billion ordinary shares at a conversion price of $0.001 a share. The price represents a 96 per cent discount to the prevailing market price of the underlying shares on June 22, 2017, the last trading day of the company's shares prior to their suspension on the Singapore Exchange (SGX).
Resources Prime said that it shall use "all reasonable efforts" to effect the resumption of trading of shares, including submitting a trading resumption proposal to the SGX by Sept 28, failing which the investor may give notice to the company to immediately redeem the convertible loan.
As at Monday, it has an issued share capital comprising 1.83 billion shares. Taking into consideration the two billion conversion shares to be issued to the investor, it would have an issued share capital comprising 3.83 billion shares. In this regard, it is proposing to issue up to 3.83 billion right shares, which will represent about 209.1 per cent of its existing issued and paid-up share capital and about 50 per cent of its enlarged issued and paid-up share capital after the issue of the conversion shares and right shares.
An application will be made to the SGX in due course for the conversion shares and rights shares to be admitted to Catalist and be listed for quotation on the exchange, said Resources Prime.