SouthGobi Announces the 2020 November Deferral Agreement
VANCOUVER, British Columbia., Nov. 20, 2020 (GLOBE NEWSWIRE) -- SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) (“SouthGobi” or the “Company”) announces that on
November 19, 2020, the Company entered into a deferral agreement (the “2020 November Deferral Agreement”) with Land Breeze II S.à.r.l. (“Land
Breeze”) and Fullbloom Investment Corporation (“Fullbloom”), each being a wholly-owned subsidiary of a major shareholder of the Company (the “Major
Shareholder”). Reference is made to the press releases of the Company dated June 19 and September 14, 2020 (the “Announcements”). Capitalized terms used
herein, unless otherwise defined, shall have the same meaning as those defined in the Announcements.
Pursuant to Section 501(c) of the Toronto Stock Exchange (“TSX”) Company Manual, the Company will be seeking approval of the 2020 November Deferral Agreement from disinterested shareholders at a meeting of shareholders (the “Meeting”) to be held at a future date to be set by the board of directors of the Company (the “Board”).
The 2020 November Deferral Agreement
The principal terms of the 2020 November Deferral Agreement are as follows:
Effectiveness of the 2020 November Deferral Agreement
- The 2020 November Deferral Agreement are subject to the approvals from the TSX and the shareholders of the Company in accordance with the
requirements of Section 501(c) of the TSX Company Manual. See “Shareholders Approval Pursuant to TSX Requirements” below.
- Land Breeze and Fullbloom agreed to grant the Company a deferral (the “Deferral”) of the following payment until August 31, 2023
(the “Deferral Date”):
(i) a deferral of cash interest and deferral fees of approximately US$ 75.2 million which were due and payable to Land Breeze on or before September 14, 2020, under the 2020 June Deferral Agreement; (ii) semi-annual cash interest payments in the aggregate amount of US$ 16.0 million payable to Land Breeze on November 19, 2020 and May 19, 2021 under the US$ 250 million convertible debenture dated November 19, 2009 (the “Convertible Debenture”); (iii) US$ 4.0 million worth of PIK Interest shares (“2020 November PIK Interest”) issuable to Land Breeze on November 19, 2020 under the Convertible Debenture (collectively, the “2020 November Deferred Amounts”); and (iv) the payment of the management fees of Q4 2019, Q1 2020 and Q2 2020, and the accrued deferral fees related thereto that is outstanding as of September 14, 2020 (US$ 1.2 million) and the management fees to be accrued in Q3 2020 to Q3 2021 under the Amended and Restated Cooperation Agreement dated April 23, 2019 (the “Deferred Management Fees”).