CONVERTIBLE ISSUE REPLACES ANNOUNCED NEW SHARE ISSUES

  • Dannemora Mineral implements a private placement of convertible debt of a minimum of SEK 130 million and maximum of SEK 150 million.
  • The convertible issue is secured through subscription commitments and prepayments exceeding the issue minimum amount of SEK 130 million.
  • The two announced new share issues are not implemented.
  • An Extraordinary General Meeting for the approval of the convertible issue will be held on November 13, 2012.
  • The Extraordinary General Meeting which has been convened for October 26, 2012 is cancelled.

As previously announced, Dannemora Mineral investigated a convertible alternative to the previously announced share issues. The evaluation had a positive outcome and the board of directors of Dannemora Mineral today decided to implement a private placement of convertible debt. Implementation of the issue is subject to approval by an Extraordinary General Meeting.

The main terms of the convertible issue are:

  • The convertible debt expires in November 30, 2015.
  • The convertible debt carries an annual interest rate of 11.75%.
  • The interest rate is paid the first time after a year of duration and then semiannually.
  • The conversion rate is SEK 40.
  • The convertible debt holders may request conversion throughout the duration.
  • Dannemora Mineral may request conversion from 1 December 2013 and during the residual duration provided that the volume weighted average price of Dannemora's B share on NASDAQ OMX First North during 20 trading days in a row exceeds the conversion rate SEK 40 and Dannemora calls conversion no later than three trading days after such period.
  • At full subscription and full conversion will Dannemora issue 3,750,000 shares of series B. The new shares would represent approximately 19.6 percent of the share capital based on the current number of shares outstanding.

The benefit with the convertible debt compared to the share issues is mainly that there initially will be no dilution for existing shareholders. There will be a considerable lower dilution even at full conversion since the conversion rate is SEK 40 compared to the issue price of SEK 20. The convertible debt will though reduce the equity ratio compared with if the company had realized the equity issues.

The convertible loan has already a higher subscription than SEK 130 million and the companys view is that there is a good chance that it will be even higher before the extraordinary general meeting on November 13. The Finnish asset management company Investo Asset Management Ltd has subscribed for convertibles up to 100 million SEK.

The decision to issue convertible debt means that the Board of Director withdraw the proposed private placement of shares amounting to SEK 130 million and the announced repair issue of approximately SEK 20 million. The Extraordinary General Meeting October 26, 2012 is cancelled. A new extraordinary general meeting for the approval of the convertible issue will be convened for 13 November 2012. Notice of the Extraordinary General Meeting is expected to be published on 26 October 2012.

Repayment of the proceeds of the rights issue will begin immediately.

The Press Release can be downloaded from the link below:

Press Release 25 October 2012 Dannemora Mineral:
http://hugin.info/137553/R/1652629/533537.pdf


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Source: Dannemora Mineral AB via Thomson Reuters ONE
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