Besra has signed an agreement for an investment by Victory Corporation Group of Switzerland which would see Victory purchase 250 million common shares in Besra Gold for net proceeds of US$14.25 million.
If the financing closes, it will result in Victory receiving a 40% stake in the common shares of Besra, making Victory the largest shareholder of the company’s common shares.
Victory is a consortium of companies representing interests that have a wide range of business involvements including oil and oil production, shipping, leisure, aviation, retailing and commodities.
The agreement also includes the sale at spot of up to 50,000 ounces of Besra’s gold per year through one of Victory’s related companies. Victory will also have the right to appoint two individuals to the Besra Board, subject to corporate law requirements and to approval by the Toronto Stock Exchange of the nominees.
Closing of the subscription agreement is expected to occur by July 10, subject to Board approvals and any necessary regulatory approvals, including that of the Toronto Stock Exchange. Besra will be seeking to rely on the financial hardship exemption from the shareholder approval requirement under the TSX Company Manual. There is no assurance the agreement in principle reached will culminate in the closing of a financing upon the terms disclosed in this media release or at all.
Besra’s CEO John Seton says, “We are very pleased to welcome Victory Corporation and its associated family offices to our company. They will bring the benefit of substantial international business acumen, experience and network to the table, in addition to an important injection of capital. We believe that Victory’s investment in Besra will significantly benefit Besra and all of its stakeholders.”
Victory Corp spokesperson Saurabh Mehrotra says, “Our strategic investment in Besra complements our existing commodities investments, belief in the long term demand for gold and recognition of Besra’s exceptional potential with the Bau Gold Project on the near horizon.”
After giving effect to the finder’s fee, the net proceeds to the company will be US$13.965 million. Besra intends to use the net proceeds of the placement to pay outstanding interest under its convertible and gold-linked notes, effect the capital investment necessary to restore production at its two Vietnamese mines to normalized levels and for general corporate and working capital purposes.
The company will then approach holders of its convertible notes to negotiate an extension of the maturity date of such notes so that there is no deemed default under the terms of the notes after giving effect to the financing and the payment of overdue interest from the net proceeds therefrom. www.besra.com