Wasabi Energy Limited Execution of DOCA (1197B)

TIDMWAS

RNS Number : 1197B

Wasabi Energy Limited

27 February 2014

Wasabi Energy Limited (Subject to Deed of Company Arrangement)

("Wasabi," "the Group" or "the Company")

27 February 2014

Execution of DOCA

Wasabi Energy Limited (Subject to Deed of Company Arrangement) is pleased to advise that, further to the announcement on 10 February 2014, the Deed of Company Arrangement ("DOCA") has been executed by the Administrators and the directors of the Company.

The DOCA sets out the requirements for settling the debts of the Company in order that it can continue to operate and, subject to a fundraising by the Company in order to finance itself and its projects going forward, re-commence trading on the ASX and AIM.

The keys terms of the DOCA are:

-- The consolidation of the existing issued share capital on the approximate basis of 1 share ("New Share") for each 860 shares currently held such that, immediately following the consolidation and issue of New Shares to creditors as described below, the creditors will hold 90% of the enlarged issued capital of the Company;

-- The issue of New Shares to all creditors, including the Secured Loan Note holders, on the basis of 2 New Shares for each $1 of debt owed to them;

-- Salida Accelerator Fund will be issued 2 New Shares for each $1 of debt owed to it, up to half of its outstanding amount (approximately $500,000). The remaining half of the Salida debt will remain in the Company as a secured debt owing by the Company with an extension of the maturity date to at least 30 June 2014.

-- A syndicate of lenders will provide $750,000 of secured funds (the "Loan") to allow the Company to progress through the DOCA process. Mr John Byrne will participate in this syndicate as set out below.

-- The shareholders of the Company will be asked to vote on resolutions necessary to implement the terms of the DOCA.

The capital of the Company post the consolidation and issue of New Shares to creditors is expected to be approximately:

 
                          3,718,761,160 
 Current Issued            shares 
                          4,324,141 New 
 Consolidated @ 1:860      Shares 
 Estimated new creditor   39,008,756 New 
  shares                   Shares 
                          43,332,897 New 
 Total Pro-forma           Shares 
 

The issued capital of the Company will be finalised once the formal proof of debt forms, which are required under the administration process to confirm the debts owed by the Company, have been received by the Administrators. This is expected to be on or about 7 March 2014, following which a notice of meeting and explanatory statement, including an update on the Company's operations, will be sent to shareholders setting out the resolutions which shareholders will have to approve in order for the Company to progress the consolidation of the issued shares and the debt for equity settlement under the DOCA. Application for the admission of the consolidated share capital of the Company will be made so that the New Shares issued to creditors pursuant to the DOCA and the existing shares, subject to the consolidation, will re-commence trading on the ASX and AIM at the same time. Trading is not expected to re-commence until a fundraising by the Company has been completed.

A further announcement will be made when the notice of meeting is published.

John Byrne, a director of the Company intends to participate in the lending syndicate that provides the $750,000 of initial funding to the Company. This initial funding is to be used to fund the Company whilst it goes through the DOCA and fundraising processes.

The proportion of the Loan provided by Mr Byrne is yet to be determined. However, if Mr Byrne, or his associated entities, were to provide the full $750,000, this would be classified as a related party transaction pursuant to the AIM Rules for Companies. The Loan will be a secured loan, carry interest at 8% per annum and will convert into New Shares in the Company at the same price and on the same terms as a proposed fundraising by the Company in the near future. The conversion may be by way of placing or underwriting of a rights issue to all shareholders. Further details on this Loan and proposed fundraising will be announced shortly.

The directors of Wasabi, other than Mr Byrne, having consulted with Cenkos Securities plc, the Nominated Advisor of Wasabi, consider that the terms of the Loan are fair and reasonable insofar as the shareholders are concerned.

For further information, please contact:

 
 Wasabi Energy Limited 
 John Byrne, Executive 
  Chairman                       [phone] 
 
 Cenkos Securities - London 
  Financial Advisor, Broker 
  & NOMAD 
 Beth McKiernan/Neil McDonald    [phone] 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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