OAKVILLE, ONTARIO--(Marketwired - May 1, 2014) - Saint Jean Carbon Inc. ("Saint Jean" or the "Company") (TSX VENTURE:SJL) is pleased to announce that it has signed a letter agreement ("Letter Agreement") with Pala Investments Limited ("Pala") pursuant to which the Company intends to complete a non-brokered $14,000,000 convertible debenture private placement ("Convertible Debenture Financing") and a $600,000 bridge loan ("Bridge Loan Financing").
Paul Ogilvie CEO, commented; "We are very pleased by the support of Pala. The financing will help to ensure that Saint Jean is fully funded to close property transactions and from there we can start work on the properties, with a goal to move closer to future production. We look forward to providing our shareholders with a full project development time line in the coming months."
Convertible Debenture Financing
Pala has committed to subscribe for up to $14.0 million of a secured convertible debenture to be issued by Saint Jean, subject to completion of satisfactory due diligence on the Company by Pala, certain other conditions as described below and the approval of the TSX Venture Exchange. The convertible debenture will have an annual coupon of 12%, a term of 3 years and an initial conversion price of $0.045 per share (subject to upward adjustment upon completion of the Share Consolidation as described below). The closing of Convertible Debenture Financing shall be subject to the following conditions:
- successful completion of a share consolidation of the Company, if required by the TSX Venture Exchange, at a ratio that will result in the adjusted conversion price, post-consolidation, being not less than $0.10 per share thereafter (or such other minimum price required by the TSX Venture Exchange) and otherwise in compliance with the rules and policies of the TSX Venture Exchange (the "Share Consolidation");
- successful completion of the acquisition of the Sri Lankan graphite project from Han Tal Graphite (Pvt) Ltd. on the terms announced by the Company on October 17, 2013 (the "Han Tal Transaction");
- prior approval by the TSX Venture Exchange and the shareholders of the Company of Pala as a Control Person of the Company;
- appointment of three Pala representatives to the Company's board of directors; and
- satisfaction of customary conditions for a financing of this type.
Upon successful completion of the Convertible Debenture Financing, the Company shall pay Pala a 2% arrangement fee on the entire principal amount along with a 1% standby fee for any undrawn portion of the principal amount. Should the Convertible Debenture Financing not close, the Company shall be obligated to pay Pala a break fee in the amount $500,000 in certain instances.
The Company intends to close the Convertible Debenture Financing as soon as is practicable. The proceeds of the Convertible Debenture Financing shall be used to fund the development of the property which is the subject of the Han Tal Transaction and for general working capital purposes.
Read more at https://www.stockhouse.com/news/press-releases/2014/05/01/saint-jean-carbon-announces-14-0-million-convertible-debenture-with-pala#7yFeyoORFJrYqsKz.99