The Sierra Leone government has agreed to convert £13.6 million lent to part of rutile and ilmenite producer Titanium Resources (TR) into shares.
The Sierra Leone government has agreed to convert £13.6 million lent to part of rutile and ilmenite producer Titanium Resources (TR) into shares.
The deal will settle a dispute between the government and British Virgin Islands-based TR, Sierra Leone’s largest exporter and private sector employer, and leave the Sierra Leone state with nearly 23 per cent of AIM-quoted TR.
The dispute centred on AIM-quoted TR’s local subsidiary Sierra Rutile Ltd (SLT) and outstanding loans from the Sierra Leone government to SLT amounting to £32 million with accrued interest. Following today’s ‘agreement in principle’, the debt will fall 42.3 per cent to £18.6 million and the Freetown government will convert the rest into new shares in TR at 12p, a 60 per cent premium to yesterday’s price but well below 2005’s 47p float price and even the past year’s 17.75p high.
The government will become TR’s second largest shareholder, with 22.8 per cent, a whisker behind Pala Investments, a £600 million Swiss investment group which recently bought 29.8 per cent of the company from veteran sector wheeler dealer Jean-Raymond Boulle. The debt/equity conversion will cut Pala’s stake to 23 per cent.
In the six months to June, Titanium Resources, steered by executive chairman Wayne Malouf and chief executive officer John Bonoh Sisay, turned a $4.8 million (£3 million) loss into $3.8 million pre-tax profits, helped by a $5.3 million insurance payment on a capsized dredge.
