2014

Resource Capital Fund V L.P. Announces $6 Million Convertible Loan Facility with Forbes & Manhattan Coal Corp.

VANCOUVER, Sept. 4, 2013 /CNW/ - Resource Capital Fund V L.P. ("RCF V") reports that on September 4, 2013, RCF and Forbes & Manhattan Coal Corp. ("Forbes Coal") entered into a loan agreement (the "Loan Agreement") for a secured US$6,000,000 convertible loan facility with a maturity date of June 30, 2016 (the "Loan").

Pursuant to the terms of the Loan Agreement, Forbes Coal agreed to pay RCF V an establishment fee equal to 3% of the Loan, or US$180,000.  This fee is payable in cash or, at the option of RCF and subject to approval by shareholders of Forbes Coal ("Shareholder Approval"), common shares of Forbes Coal ("Common Shares") at a price of C$0.36 per Common Share (the "Fee Shares").

Interest accrues on the Loan at a rate of 10% per annum, payable on each calendar quarter.  Upon receipt of Shareholder Approval, the interest rate will decrease to 8% per annum and RCF may elect that Forbes Coal pay accrued interest in common shares (the "Interest Shares").  The Interest Shares shall be issued at the volume weighted average price of the Common Shares on the TSX Venture Exchange for the 20 trading days (the "20-Day VWAP") prior to the interest payment date.  If Shareholder Approval is not obtained, the interest rate of the Loan will increase to 15% per annum, all interest payments must be paid in cash and the Loan's maturity date will be accelerated to June 30, 2014.

Subject to Shareholder Approval, US$2,000,000 of the Loan will automatically convert into Common Shares, such conversion to occur concurrently with the completion of a proposed private placement of Common Shares by Forbes Coal that does not involve RCF V, and the remaining amount of the Loan will become convertible into Common Shares at the option of RCF (the "Conversion Shares").  The Conversion Shares shall be issued at a price of C$0.36 per Common Share.

The Loan, and the issuance of any Common Shares pursuant to the Loan Agreement, is expected to be presented for Shareholder Approval at the annual and special meeting of Forbes Coal currently scheduled to take place on September 11, 2013.

Immediately prior to entering into the Loan Agreement, RCF owned and controlled 6,867,443 Common Shares representing approximately 19.97% of the outstanding Common Shares. Assuming the issuance of all Fee Shares, Interest Payment Shares (using a 20-Day VWAP of C$0.32) and Conversion Shares that RCF may become entitled to, and assuming a foreign exchange rate of C$1.00 to US$1.00, RCF would own and control 28,294,767 Common Shares, representing approximately 50.1% of the outstanding Common Shares.

The securities were acquired for investment purposes.  RCF will evaluate its investment in Forbes Coal from time to time and may, based on such evaluation of market conditions and other circumstances increase or decrease its shareholding in Forbes Coal.


SOURCE Resource Capital Fund V L.P.




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