REG - Primorus Investments - Further re Investment in Mustang

Primorus InvestmentsAnnouncement

19/01/2022 08:05

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RNS Number : 9393Y  Primorus Investments PLC  19 January 2022

Primorus Investments plc

 

("Primorus" or the "Company")

 

Revised Backstop arrangements for the Investment in Mustang Energy PLC

 

Primorus Investments plc (AIM: PRIM) provides an update in relation to its
investment in Mustang Energy PLC ("MUST").

 

As announced by MUST on 17 January 2022, the notice period for the Backstop
Arrangement was extended to 18 January 2022 to enable the parties more
visibility as to the potential outcome of the VRFB-H litigation and more time
to negotiate alternative arrangements.  Under the terms of the current
Backstop Arrangement, Primorus would redeem its Convertible Loan Notes (CLN)
and receive the full value of its investment (and interest) through the
allocation of Bushveld Minerals PLC ("BMN") shares.

 

BMN, MUST, the other investors in the CLN and Primorus have been negotiating
alternatives to the Backstop Arrangement.  This is to ensure Primorus can
maintain an interest in this transaction, but on a risk adjusted basis.

 

The renegotiated Backstop agreement has been agreed as follows:

·      Primorus has transferred $1,000,000 of its $2,500,000 CLN
instruments to certain existing CLN investors (the "Investors"), in return for
Primorus receiving $1,000,000 in cash.  It has also transferred the
associated warrants (representing 40% of the overall warrants based on 1
warrant for every two shares converted under the CLN) to subscribe for new
ordinary shares in MUST to the Investors.

·      The interest accrued to date, $72,054.79 will also been settled,
in cash, by the Investors.

·      The Backstop Date for the remaining CLN has been extended to 28
February 2022.

·      The terms of the Backstop have also been amended and, at
Primorus' sole discretion, on 28 February 2022 it has the option to:

o  Convert its outstanding CLN into Mustang shares in accordance with the
original agreement; or

o  Transfer the outstanding CLN plus interest accrued to BMN and, at BMN's
sole discretion, BMN shall either repay the CLN (and accrued interest) to
Primorus or enter into a Convertible Loan Note with Primorus on the terms set
out below.  If Primorus selects to transfer the outstanding CLN to BMN, it
will also transfer to BMN the balance of its warrants to subscribe for new
ordinary shares in MUST.

 

BMN Convertible Loan Note (BCLN)

 

If BMN enacts the BCLN it shall be based on the key terms set out below:

 

·      An overall duration of 18 months with a maturity date of 14 July
2023;

·      It shall bear interest at the annual rate of 10%;

·      It shall allow Primorus to convert 1/6 of the total BCLN every
three months into new ordinary shares in BMN and any unconverted BCLN shall
roll over and be added onto the following three months allocation;

·      Primorus is only permitted to issue a single conversion notice in
each of the three-month periods (effectively six conversion notices over the
18 month term) and BMN has the right to purchase, for cash, some or all of the
shares that are proposed for conversion in accordance with the Payment
Mechanism (stated below);

·      Upon conversion of any BCLN by Primorus and where the value of
the conversion shares exceeds £250,000 in a single transaction or series of
transactions within a three month period, Primorus must give written notice
BMN allowing them five business days, following receipt of such notice, to
arrange the sale of such shares to a purchaser of its choice at a price agreed
with Primorus, failing which Primorus shall be free to dispose of any or all
of such Shares as it sees fit.

·      The total number of shares to be allocated in BMN at the date of
transfer (28 February 2022) will be calculated on the basis of the prior 20
day VWAP as stated on Bloomberg

·      BMN shall have the right to redeem all or part of the CLN at any
time during its term by paying, in cash, the par value of the BCLN (plus
accrued interest) to Primorus.  In addition, if the BMN share price is higher
than the par value of the BCLN then BMN shall also pay the difference, in
cash, between the two prices based on the prior 10 day VWAP commencing from
the redemption date (referred to above as the "Payment Mechanism").

 

Primorus has agreed to the extension because it believes this will allow
sufficient time for the litigation relating to the Enerox transaction to be
finalised.  If the litigation is settled in favour of MUST then Primorus has
retained the option to complete 60% of the originally intended investment.
If the litigation does not get settled in favour of MUST then Primorus has
substantially protected itself from any downside.

 

Primorus would like to thank BMN and the Investors for their support and
willingness to amend the Backstop Arrangement, which ensures Primorus can
maintain an interest in this transaction.

 

This announcement contains inside information for the purposes of the UK
Market Abuse Regulation and the Directors are responsible for the release of
this announcement.

Forward Looking Statements

This announcement contains forward-looking statements relating to expected or
anticipated future events and anticipated results that are forward-looking in
nature and, as a result, are subject to certain risks and uncertainties, such
as general economic, market and business conditions, competition for qualified
staff, the regulatory process and actions, technical issues, new legislation,
uncertainties resulting from potential delays or changes in plans,
uncertainties resulting from working in a new political jurisdiction,
uncertainties regarding the results of exploration, uncertainties regarding
the timing and granting of prospecting rights, uncertainties regarding the
Company's ability to execute and implement future plans, and the occurrence of
unexpected events.  Actual results achieved may vary from the information
provided herein as a result of numerous known and unknown risks and
uncertainties and other factors.

 

 

 

For further information please contact:

 

 Primorus Investments plc

 Matthew Beardmore, Chief Executive Officer   +44 (0)20 8154 7907

 Nominated Adviser

 Cairn Financial Advisers LLP                 +44 (0) 20 7213 0880

 Sandy Jamieson/James Caithie

 

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