Iron Ore miner African Minerals Ltd said Tuesday it did not have money for a $17 million coupon payment on its $400 convertible bonds due Feb. 10.
The Company said in its financial update that “Under the terms of the Bond, the biannual coupon payment of $17m is due on 10 February 2015. The Company advises it has insufficient funds to meet this payment, and it is unlikely that such a payment will be made in the near future.”
The update indicated that AML were seeking funding as it said “Negotiations continue regarding a long term funding solution with Shandong Iron and Steel Group (“SISG”), AML’s partner and 25% owner of the Project. The Company also continues to evaluate potential funding solutions with other parties, including but not limited to a partial sale of AML’s stake in the Project. Reaching that outcome remains AML’s utmost priority and while the Board continues to make every effort to advance these discussions, there can be no certainty that agreement will be achieved.”
The lights are however not shining brightly for the company as it admitted that “In the event that a funding solution is successfully reached, it is highly likely that the outcome would leave little or no value for AML’s shareholders, due to significant balances owed to trade creditors before the Project went into care and maintenance, as well as existing bank debt amounting to $276m and the $400m convertible bond, all of which sit ahead of AML’s shareholders in the capital structure. Furthermore, SISG has made a number of claims against the Project which further diminish its value.”
As it is now the free spending multi million-dollar iron ore miner says, “AML’s ordinary shares will remain suspended until the fundamental uncertainty regarding the Company’s financial position is removed. The Project remains under care and maintenance.”
Friday February 13, 2015