Business
Variation to existing CLN agreement and conversion
Variation to existing CLN agreement and conversion.
About this update from Karelian Diamond Resources Plc
[{"type":"text","content":"\n \n 20 December 2022\n Karelian Diamond Resources plc\n (“Karelian Diamonds” or the “Company”)\n Variation to existing convertible loan agreement and conversion of loan\n Background\n On 10 December 2019 the Company announced that it had raised £240,000 through a subscription of £120,000 at 4 pence per share and the issue of an unsecured convertible loan note (the “Convertible Loan Note”) to raise £120,000. The fundraise in December 2019 was undertaken with Fredrik Björnberg (the “Lender”), a member of a prominent family in Finland which previously owned the Luikonlahti copper mine in the Kaavi area of Finland and founded the company which originally discovered the Lahtojoki diamond deposit over which Karelian Diamonds now hold a mining concession.\n The Convertible Loan Note had a term of three years and has attracted interest at a rate of 5% per annum to be payable on the redemption or conversion of the Convertible Loan Note. The Convertible Loan Note, including the total amount of accrued but unpaid interest, was originally convertible at a conversion price of 10 pence per share.\n On 29 November 2022 the Company announced, as part of its final results announcement for the year ended 31 May 2022, that it had started discussions with the Lender in relation to an extension of the term, or conversion, of the Convertible Loan Note and that a number of options were available to the Company. The Company also stated that the loan note holder was both a supportive and significant shareholder in the Company and that the Board was confident that the discussions would be satisfactorily concluded.\n Mr Fredrik Björnberg is currently interested in 3,000,000 ordinary shares of €0.00025 each in the capital of the Company (“Ordinary Shares”) representing 3.70 per cent. of the current issued share capital of the Company.\n Agreement to vary terms and conversion of Convertible Loan Note\n The Company has agreed with the Lender to vary the terms of the Convertible Loan Note such that the conversion price of the Convertible Loan Note is amended from 10 pence per Ordinary Share to 4 pence per Ordinary Share (the “Revised Conversion Price”). The Revised Conversion Price represents an 81% premium on the Company’s closing mid-market share price on 19 December 2022.\n Following the variation to the existing loan agreement as detailed above, th...