REG - Bens Creek Group PLC - Amendment and conversion of loan facility with MBU

Bens CreekAnnouncement

03/03/2023 07:00

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RNS Number : 7470R  Bens Creek Group PLC  03 March 2023

3 March 2023

 

Bens Creek Group plc

 

("Bens Creek", the "Group" or the "Company")

 

Amendment and conversion of loan facility with MBU Capital Group Limited

 

Bens Creek Group plc (AIM:BEN), the owner of a metallurgical coal mine in
North America supplying the steel industry, announces that MBU Capital Group
Limited ("MBU") has exercised its right to convert the full outstanding amount
of its loan facility with the Group (the "Loan Facility") into new ordinary
shares of 0.1p in the Company ("Ordinary Shares"). The Company has also agreed
with MBU to vary the conversion price of the proportion of the Loan Facility
that is convertible at 60p to now convert at 30p.

 

Prior to admission of the Company's ordinary shares to trading on AIM (the
"IPO"), MBU provided the Loan Facility to the Company in the amount of up to
£10m, details of which are set out in the Company's admission document
published on 13 October 2021. Under the Loan Facility agreement entered into
between MBU and the Company at the time of the IPO, MBU could, at any time up
to the facility expiry date, elect to convert the principal and interest into
new ordinary shares in the Company at 15p per share. This conversion price
compares to the Company's IPO price 10p per share. Under the terms of the Loan
Facility, the Company can pay back and drawdown in any amounts up to the
maturity date, being 30 June 2023.

 

During the months following the IPO the Company's share price rose
considerably, peaking on 13 April 2022 at 104p, making utilisation of the Loan
Facility unattractive to the Company. In April 2022 MBU and the Company agreed
to a variation of the terms of the Loan Facility such that amounts drawn under
the Loan Facility from 7 April 2022 would be convertible at 60p, as opposed to
15p, and this variation was announced as transaction with a related party on 6
June 2022.

 

Since 6 June 2022 the Company has reduced the total balance outstanding owed
to MBU under the Loan Facility, including interest, to £2.6 million
convertible at 15p and from £5.3 million to £1.7 million convertible at 60p.

 

On 2 March 2023, the Company and MBU entered into an agreement to amend the
conversion price of 60p on the £1.7 million outstanding amount be amended to
30p. On the same day MBU also exercised its right to convert the total
outstanding Loan Facility amount (including accrued interest) of £4.3 million
into new Ordinary Shares (the "Conversion"). The Loan Facility with MBU will
remain in place until 30 June 2023 although post Conversion no amounts will
have been  drawn down. The Company's intention is that no further drawdowns
will take place following Conversion and before the facility ends.

 

Following discussions with MBU the Company agreed to this variation in the
conversion price on the explicit understanding that MBU converts the full
outstanding amount of the Loan Facility immediately. The Company has
previously announced its intention to, at the earliest opportunity, declare a
maiden dividend. Before doing so, the Company wishes to ensure that it has
limited exposure to any substantial debt obligations which could adversely
affect cashflow, particularly in the short term.

 

The Board of the Company believes the amendment of the conversion price on the
£1.7 million (which includes  accrued interest) from 60p to 30p is in the
best interests of the Company and its shareholders as it improves the
Company's financial performance, by reducing debt, interest payments and
outgoing cashflow.

 

Following the Conversion MBU will receive 23,283,728  new Ordinary Shares and
MBU will hold a beneficial interest in 213,863,207 Ordinary Shares or 53.67%
of the voting rights in the Company.

 

Related party transaction

The variation to the MBU loan facility is deemed to be a related party
transaction pursuant to rule 13 of the AIM Rules for Companies. The directors
of the Company independent of MBU (being Robin Fryer and David Harris)
consider, having consulted with the Company's nominated adviser, Allenby
Capital Limited, that the terms of the transaction are fair and reasonable
insofar as the Company's shareholders are concerned.

 

Adam Wilson, Chief Executive of Bens Creek, said; 'We are very pleased with
our progress to date and our ability to remove substantial levels of debt from
our balance sheet which in turn will bring cash flow improvement taking us
nearer towards being able to provide a maiden dividend for our shareholders.'

Total Voting Rights

Application will be made shortly for the 23,283,728 new Ordinary Shares to be
admitted to trading on AIM ("Admission") and it is expected that Admission
will occur on or around 10 March 2023.

 

Upon Admission, the Company's issued share capital will consist of 398,473,728
Ordinary Shares with one voting right each. The Company does not hold any
Ordinary Shares in treasury. Therefore, the total number of Ordinary Shares
and voting rights in the Company will be 398,473,728. With effect from
Admission, this figure may be used by shareholders in the Company as the
denominator for the calculations by which they will determine if they are
required to notify their interest in, or a change to their interest in, the
share capital of the Company under the FCA's Disclosure Guidance and
Transparency Rules.

 

 

For further information please contact:

 

 Bens Creek Group plc                +44 (0) 204 558 2300

 Adam Wilson, CEO

 Peter Shea, Chief of Staff

 Allenby Capital Limited (Nominated Adviser and Joint Broker)          +44 (0) 203 328 5656

 Nick Athanas / Nick Naylor / George Payne (Corporate Finance)

 Kelly Gardiner (Sales and Corporate Broking)

 WH Ireland Limited (Joint Broker)   +44 (0) 207 220 1666

 Harry Ansell / Katy Mitchell

 

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