Kenmare Resources : Conditional US$100 million subscription agreement as part of a proposed capital restructuring

Kenmare Resources plc ("Kenmare" or "the Company")

 28 April, 2016
               

Conditional US$100 million subscription agreement as part of a proposed capital restructuring

Kenmare Resources plc (LSE:KMR, ISE:KMR), one of the leading global producers of titanium minerals and zircon, which operates the Moma Titanium Minerals Mine (the "Mine" or "Moma") in northern Mozambique, is pleased to advise that it has entered into a conditional subscription and relationship agreement with King Ally Holdings Limited ("King Ally"), a chemicals trading company incorporated in the British Virgin Islands, in respect of a proposed investment by King Ally in Kenmare. This proposed investment is in respect of US$100 million and is on the basis that King Ally would hold not more than 29.9% of the enlarged issued share capital of the Company following the completion of a capital restructuring, as described below.

Discussions with Kenmare's lenders in relation to a deleveraging plan (originally required to have been agreed with lenders by 31 January, 2016) are continuing, and the lenders continue to work with Kenmare on satisfaction of the pre-conditions necessary for the implementation of such a deleveraging plan.

As currently envisaged, the deleveraging plan entails a capital restructuring by, inter alia , an equity fundraising of not less than US$275 million, of which a significant portion would be used to reduce debt and the balance would be available to the Company for working capital purposes. The investment by King Ally would form part of this US$275 million equity fundraising, together with the proposed US$100 million equity investment by SGRF, a sovereign wealth fund of the Sultanate of Oman, previously announced by the Company as having been approved in principle by SGRF and in respect of which discussions are continuing, and an investment of not less than $75 million which would be required to be raised from new and existing shareholders in the Company. As previously announced, it is intended that there will also be an opportunity for existing shareholders to subscribe in an open offer on the same terms as under the US$275m equity placing.

Any investment by King Ally and/or any commitment by SGRF, if made, will be subject to the satisfaction of a range of conditions including, inter alia, their satisfaction with the form and content of a prospectus to be prepared by Kenmare, that a final agreement with lenders is entered into providing for the envisaged capital restructuring and becomes unconditional, and that not less than, in aggregate, US$275 million is raised by way of an equity issue, as well as other conditions conventional for an equity issue of this nature. As of the date of this announcement, the lenders have not yet agreed to the deleveraging plan.

In addition, implementation of the capital restructuring will require the approval by Kenmare shareholders of a number of resolutions (expected to include ordinary resolutions, special resolutions and resolutions on which only certain independent shareholders can vote) at an extraordinary general meeting of the Company to be convened.

Accordingly, a significant number of uncertainties remain and there can be no certainty that the capital restructuring, including the investment by King Ally, will be completed.

2015 Annual Report
Kenmare intends to issue its annual report and accounts in respect of the year ended 31 December, 2015 on 29 April, 2016.

Kenmare Resources plc
Michael Carvill, Managing Director                                    
Tel: +353 1 671 0411                                                             
Mob: + 353 87 674 0110                                                      

Tony McCluskey, Financial Director
Tel: +353 1 671 0411                                                             
Mob: + 353 87 674 0346

Jeremy Dibb, Corporate Development and Investor Relations Manager
Tel: +353 1 671 0411
Mob: + 353 87 943 0367

Murray                                                                                     
Joe Heron                                                                                 
Tel: +353 1 498 0300                                                             
Mob: +353 87 690 9735                                                       

Buchanan
Bobby Morse
Tel: +44 207 466 5000




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The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Kenmare Resources via GlobeNewswire

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