Related Party Transaction

 

TIDMZZL 
 
RNS Number : 8528N 
Zeehan Zinc Limited 
25 February 2009 
 

25 February 2009 
 
 
ZEEHAN ZINC LIMITED 
('Zeehan Zinc' or the 'Company') 
 
 
Related Party Transaction 
 
 
 
 
On 12th December 2007, the Company announced it had entered into an agreement 
with Creat Group Company Limited ("Creat Group") through subsidiaries of Creat 
Group, to raise GBPGBP4.275 million by way of a convertible loan ("Convertible 
Loan"). 
 
 
The Convertible Loan is in the form of two convertible loan notes which have a 
term of five years and carry a coupon of 6% per annum. Interest will be 
compounded if the Company opts not to meet the interest payments on the relevant 
dates, such interest to be payable at maturity. The first Note has a maturity 
date of 15 February 2013 and the second Note has a maturity date of 15 April 
2013. The Convertible Loan is convertible into ordinary shares of the Company at 
a conversion price of 15p. 
 
 
Funds from the first Note have been received in full. Funds from the second Note 
have been received in part, with GBP529,134 outstanding. Following a request 
from Creat Group, the Board of Zeehan Zinc agreed, in January 2009, to the early 
repayment of GBP1,250,000 principal (plus accrued interest) provided under the 
Convertible Loan.The early repayment has been made from funds received by the 
Company from Creat Group, pursuant to the share subscription approved at the AGM 
of 14th November 2008. 
 
 
The independent directors have determined that the Company has sufficient cash 
to complete its exploration program and has given an extension to Creat Group 
concerning the remaining funds due under the second Note until such time as it 
is required. The Board has determined that there is no reason to increase 
interest expense when Creat Group has shown its willingness to support the 
working capital needs of the Company. 
 
 
The part-repayment of the Convertible Loan is a related party transaction under 
AIM Rule 13. The independent directors of the Company consider that the terms of 
the transaction are fair and reasonable insofar as shareholders are concerned. 
The Company's Nominated Adviser is awaiting documentation from the Company that 
will allow it to form an opinion as to the terms of the transaction and a 
further announcement will be made in due course. 
 
 
 
 
For further information please visit www.zeehanzinc.com or enquire to: 
 
 
Zeehan Zinc plc   c/o Bankside 
Tad Ballantyne                                  Tel: [phone] 
 
 
Libertas Capital                                  Tel: [phone] 
Jakob Kinde, Anthony Rowland 
 
 
Bankside Consultants Tel: [phone] 
Simon Rothschild, Oliver Winters 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
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