Operations (contd.)
Capital restructuring
In February 2009, the Company amended the Credit Facility increasing the potential borrowing base available from US$50 million to US$100 million, subject to certain terms and conditions, including the issuance of an amended and restated warrant to Macquarie to subscribe for up to 547,918,106 new ordinary shares, of which 121,759,579 warrants with an exercise price of 4.54p per ordinary share were fully vested on the date of grant (the ‘Warrant Deed’). Vesting of the additional warrants under the Warrant Deed is tied to future increases of the Credit Facility borrowing base from US$55 million to US$85 million.
In conjunction with restructuring the Credit Facility, the Company approached its bondholders with a comprehensive restructuring proposal to defer the final maturity date of the Bonds until September 2012 and to provide the Company with a two-year option to convert cash interest payments on the Bonds into additional principal. In exchange, the Company agreed to reduce the conversion price of the Bonds from 133p to 35p, with a fixed exchange rate of US$1.49 to £1, and to issue up to 120 million warrants at an exercise price of 5p per new ordinary share to the bondholders.
On 12 May 2009, the Company received the requisite shareholder and bondholder approvals for the terms of restructuring of the Credit Facility and the Bonds, both of which are more fully described in the Financial Review on pages 22 and 23 of the Directors’ Report in the Group’s Annual Report for the year ended 31 March 2009.
In August 2009, the Group secured an increase in the borrowing base commitment under the Credit Facility from US$50 million to US$80 million, which vested an additional 243,519,158 new ordinary shares under the Warrant Deed.
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