Sunkar Resources PLC UPDATE RE NEW CONVERTIBLE LOAN FACILITY (1556E)

TIDMSKR

RNS Number : 1556E

Sunkar Resources PLC

07 April 2014

7 April 2014

RNS

SUNKAR RESOURCES PLC

("Sunkar" or the "Company")

UPDATE RE NEW CONVERTIBLE LOAN FACILITY

Sunkar (AIM: SKR) announces that, further to the announcement released on 2 April 2014, regarding the Company's financial position, it has raised $1.28 million through the issue of 1,280,000 Convertible Loan Notes of $1 each (the "CLN") to Sun Avenue Partners Corporation ("SAPC").

The funds provided by the issue of the CLN will be used to make the overdue payments on the ACB bank loan and for general working capital requirements. The Directors believe that the CLN will provide sufficient working capital until additional earth moving contracts can be agreed.

The CLN is repayable in a single instalment on the earlier of (i) 12 months from the date of issue and (ii) the date on which the Ministry of Industry and New Technologies of the Republic of Kazakhstan ("MINT") exercises its pre-emption rights to acquire the Ordinary Shares which would be issued on conversion of the CLN. Interest will accrue on the CLN at the rate of 10 per cent. per annum.

The CLN may only be converted in the event that the MINT waives its rights to acquire the Ordinary Shares arising on conversion of the CLN. The CLN is convertible into a maximum of 34,065,202 ordinary shares of 0.1p each in the Company ("Ordinary Shares") at a price of approximately $0.0376 (approximately 2.2p) per share. Conversion would increase SAPC's interest in the Company's share capital as enlarged by the conversion from its current 51.15 per cent. to 55.59 per cent.

Related Party Transaction

SAPC is a substantial shareholder and accordingly the CLN is a related party transaction under the AIM Rules. With regard to the Company's requirement for further funding, the Directors have considered alternative sources of funding, including bank debt and the issue of equity, and have concluded that such alternatives would not be available to the Company, within the required timeframe, on terms more beneficial than those offered by SAPC.

The Directors consider, having consulted with the Company's nominated adviser, Strand Hanson, that the terms of the CLN are fair and reasonable insofar as the Company's shareholders are concerned.

For further information, please contact:

Sunkar Resources plc

   Teck Soon Kong, Chairman                               Tel: [phone] 

Serikjan Utegen, CEO

Strand Hanson Limited

   Stuart Faulkner                                                Tel: [phone] 

Andrew Emmott

James Dance

Bankside Consultants

   Simon Rothschild                                              Tel: [phone] 

or visit: www.sunkarresources.com

This information is provided by RNS

The company news service from the London Stock Exchange

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