Banro Corporation
April 7, 2017
Banro Provides Update on Recapitalization Transactions
TORONTO, CANADA--(Marketwired - April 7, 2017) - Banro Corporation ("Banro" or the "Company") (NYSE MKT:BAA)(TSX:BAA) is pleased to provide an update on the progression of the Company's recapitalization (the "Recapitalization") described in the Company's management information circular dated February 27, 2016 (the "Circular").
Banro reports that the Ontario Superior Court of Justice has issued the final order (the "Final Order") which, among other things, approves the plan of arrangement (the "Plan of Arrangement") under the Canada Business Corporations Act to implement certain transactions under the Recapitalization. Capitalized terms used in this press release not otherwise defined shall have the meaning ascribed thereto in the Circular.
With receipt of the Final Order, substantially all material conditions precedent to the Plan of Arrangement are now satisfied and, as a result, the Company anticipates implementing the Plan of Arrangement and closing the Recapitalization on April 12, 2017.
The Recapitalization contemplates, among other things, (a) the refinancing of the maturing US$175 million senior secured 10% notes due March 1, 2017 of the Company and US$22.5 million loan with new US$197.5 million senior secured notes with a 4-year maturity and new common shares of the Company, (b) the conversion of the outstanding exchangeable preferred shares of each of Twangiza (Barbados) Limited and Namoya (Barbados) Limited, gold-linked preferred shares of Banro Group (Barbados) Limited and Series A Preference Shares of Banro into common shares of the Company (the Series B Preference Shares of Banro will be cancelled for no consideration), (c) the execution of a gold forward sale agreement to raise US$45 million to be used by the Company for working capital and general corporate purposes, including to fund transaction costs and repay a US$6.5 million interim loan facility recently obtained by the Company, and (d) the extension of the maturity dates on an existing US$10 million loan from July 15, 2018 and September 1, 2018 to February 28, 2020. In addition, certain stock options of the Company with an exercise price equal to or in excess of Cdn$0.80 per share will be cancelled for no consideration.
As a step to the Plan of Arrangement, the board of directors of Banro immediately prior to the Effective Time shall be deemed to have resigned and a new board of directors shall be deemed to have been appointed. It is expected that the new Banro board of directors will comprise Jiongjie Lu (an incumbent director and the director acceptable to RFW), Robert L. Rauch (the director acceptable to Gramercy), John Clarke (an incumbent director and the Chief Executive Officer and President of Banro) and the following individuals acceptable to all of the Requisite Consenting Parties: Richard Brissenden (an incumbent director), Derrick Weyrauch (an incumbent director), Peter Cowley (an incumbent director), Robert Alexander Rorrison and Michael Hankin Li.
Banro Corporation is a Canadian gold mining company focused on production from the Twangiza mine, which began commercial production September 1, 2012, and on production at its second gold mine at Namoya, where commercial production was declared effective January 1, 2016. The Company's longer term objectives include the development of two additional major, wholly-owned gold projects, Lugushwa and Kamituga. The four projects, each of which has a mining license, are located along the 210 kilometre long Twangiza-Namoya gold belt in the South Kivu and Maniema provinces of the Democratic Republic of the Congo. All business activities are followed in a socially and environmentally responsible manner.
