Tirex Resources Announces Restructuring of EBRD Convertible Loans
488-1090 West Georgia St. www.tirexresources.com Vancouver B.C. Canada V6E3V7 [email protected] Tel: 604-687-7130 TSX-V: TXX
December 18, 2017 - NR 13-2017
NEWS RELEASE
Tirex Resources Announces Restructuring of EBRD Convertible Loans
- EBRD to convert debt into equity
- 10 for 1 share consolidation
- Financing targeted post completion of the debt conversion and share consolidation
Tirex Resources Ltd. (“Tirex” or the “Company”) announces that it has entered into definitive agreements with the European Bank for Reconstruction and Development (“EBRD”), pursuant to which, among other things, EBRD will receive 38,275,000 common shares of Tirex in full settlement of the convertible debt and accrued interest owing to EBRD.
Pursuant to a convertible loan agreement dated January 9, 2008, as amended and restated from time to time, including most recently in March 2017 (“Convertible Loan Agreement”), Tirex currently owes EBRD an aggregate of €6,000,000 of principal and approximately €1,100,333.35 of accrued interest (totalling C$10,741,384) (“Loan”). The issuance of shares in settlement of this debt (“Debt Settlement”) is subject to a number of conditions precedent, including TSX Venture Exchange final approval (conditional approval has been received). While there is no assurance all conditions will be met, the Company is confident it will be able to deliver all closing documents as required by EBRD. Closing of the Debt Settlement is expected to occur on or by December 31, 2017.
Prior to completion of the Debt Settlement, EBRD owns and controls 4,000,000 common shares of Tirex and, pursuant to the terms of the Convertible Loan Agreement, has the right to convert the principal and accrued interest under the Loan for an aggregate of approximately 23,644,735 common shares of Tirex, which would represent, together with the 4,000,000 common shares it currently owns, approximately 19.99% of the issued and outstanding shares of Tirex (assuming such conversion).
On closing of the Debt Settlement, EBRD will own and control 42,275,000 common shares of Tirex, representing approximately 27.56% of the then 153,418,790 shares outstanding (taking into account the issuance of shares to EBRD). This represents an increase of approximately 14,630,265 shares of Tirex (representing an increase of approximately 7.57% of the issued and outstanding shares of Tirex) from the 4,000,000 shares EBRD owned prior to the Debt Settlement plus the approximately 23,644,735 shares which it was entitled to receive upon conversion of all amounts owing to it pursuant under the Convertible Loan Agreement (prior to the Debt Settlement).
As a significant shareholder, EBRD has negotiated the terms of a shareholder’s agreement pursuant to which, for so long as EBRD maintains a certain minimum equity interest:
(i) Tirex will have certain continuous disclosure obligations to EBRD, including financial statements and updates on work done on its mineral properties;
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(ii) Tirex will be subject to similar operational standards as were included in its loan agreement with EBRD;
(iii) EBRD will be entitled to representation on Tirex’s board of directors; and
(iv) EBRD will have a right to participate in future securities offerings of Tirex so as to maintain its percentage equity interest.
A copy of the Shareholder’s Agreement will be filed on SEDAR.
After the completion of the share issuance to EBRD noted above, Tirex intends to complete a consolidation of its common shares on a 10 for 1 basis. The effective date of this consolidation and the corresponding change to the CUSIP number will be announced when known. Assuming no other change to the issued capital of the Company, upon completion of this consolidation Tirex will have approximately 15,341,979 common shares issued and outstanding. The Company is also considering a name change concurrent with the share consolidation. Post share consolidation, the Company intends to complete an equity financing which is necessary to retain and advance key projects.
Tirex Chief Executive Officer, Mr. Fred Tejada, states, “The conversion of the EBRD debt into equity, in combination with the share consolidation and the patience of contractors, consultants and employees in Albania, has resulted in a potential path forward for the Company. The Company believes that without these measures, it would not have been possible to continue.”
The EBRD fosters transition to market economies in countries from central and eastern Europe to central Asia and the southern and eastern Mediterranean. Since the EBRD's establishment in 1991, the bank has grown to be the largest financial investor in their region of operations. The EBRD is owned by 66 countries, the European Union and the European Investment Bank. The EBRD's very strong capital position, prudent financial management and strong shareholder support underpin the EBRD's AAA/Aaa/AAA (stable) credit rating.
EBRD intends to acquire the common shares of Tirex for investment purposes. Depending on market conditions and other factors, EBRD may from time to time acquire and/or dispose of securities of Tirex or continue to hold its current position. A copy of the early warning report required to be filed with the applicable securities commission in connection with the Debt Settlement will be available on SEDAR at www.sedar.com and can be obtained by contacting Viktoria Melohina at +44 20 7338 8467. EBRD’s address is set out below:
The European Bank for Reconstruction and Development One Exchange Square London EC2A 2JN United Kingdom
On behalf of the Company, “Fred Tejada”
Chief Executive Officer
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.