LONDON, May 13, 2019 /CNW/ - The European Bank for Reconstruction and Development (the "EBRD") announces that, further to the press release issued by Euromax Resources Ltd. (the "Company") on 10 May 2019, the EBRD has amended certain terms of the US$5,000,000 convertible debenture with the Company (the "Convertible Debenture"). The amendments comprised (i) extending the maturity date to 28 February 2021, (ii) amending the conversion price from C$0.23 per common share to C$0.15 per common share, and using this same conversion price in respect of conversion of all amounts (including interest and fees) payable in connection with the Convertible Debenture, and (iii) reducing the annual interest rate from 20 per cent. to 7 per cent, effective as of 31 March 2019 (collectively, the "Amendments").
Completion of the Amendments to the Convertible Debenture was one of the conditions precedent to private placements completed by the Company on 10 May 2019, as disclosed by the Company in its press release of 13 May 2019 (the "Transaction").
Prior to completion of the Transaction, excluding the number of common shares underlying the Convertible Debenture and the Warrants (as defined below), EBRD owned approximately 14.0% of the Company's issued and outstanding common shares. Following completion of the Transaction, excluding the number of common shares underlying the EBRD Debenture and the Warrants, EBRD currently owns approximately 7.1% of the Company's issued and outstanding common shares.
Following the Amendments to the Convertible Debenture, EBRD would be entitled to beneficially own and control an aggregate of 115,201,110 common shares of the Company (including the common shares it currently holds and assuming (i) exercise by EBRD of the 5,915,000 warrants issued to it on January 12, 2015 (each, a "Warrant"), each Warrant exercisable for one common share at a price of C$0.40 per Warrant); (ii) conversion of all amounts owing to EBRD pursuant to the Convertible Debenture (as amended pursuant to the Amendments) at the amended maturity date as of 28 February 2021; (iii) a conversion price for all amounts owing under the Convertible Debenture of C$0.15; and (v) and an exchange rate of US$1 = C$1.3316), representing a beneficial ownership interest of approximately 27.2% (taking into account completion of the Transaction and assuming no other security holders of the Company exercise any convertible securities or warrants which they may own).
Prior to the Amendments of the Convertible Debenture, had EBRD exercised its Warrants and converted all amounts under the terms of the Convertible Debenture (unamended by the Amendments), it would have been entitled to beneficially own and control an aggregate of 159,084,616 common shares of the Company (including the common shares it currently holds), representing a beneficial ownership interest of approximately 52.6% (prior to the Amendments and prior to the completion of the Transaction).
As a result of the Amendments to the Convertible Debenture, EBRD is entitled to beneficially own and control 43,883,505 fewer common shares of the Issuer (using the assumptions set out above), representing approximately 10% of the issued and outstanding shares of the Company (taking into account completion of the Transaction).
The EBRD, One Exchange Square, London, EC2A 2JN, United Kingdom, entered into the extension of the EBRD Debenture for investment purposes. Depending on market conditions and other factors, the EBRD may from time to time acquire and/or dispose of securities of the Company or continue to hold its current position. A copy of the early warning report required to be filed with the applicable securities commissions in connection with the extension of the EBRD Debenture will be available on SEDAR at www.sedar.com and can be obtained by contacting Anastasia Silaeva at +44 (0) 7338 7745.
SOURCE The European Bank for Reconstruction and Development