Pan Asia embroiled in dispute over convertible notes deal
Tuesday, February 28 2017 - 01:17 PM WIB
ASX-listed Pan Asia Corporation Ltd announced Tuesday it has received notification from Polo Investments Ltd that Singapore?s Universal Coal Resources Pte Ltd is in default under the terms of a Convertible Loan Agreement (CLA) entered into between Polo and Universal.
The company said in a statement that Polo has requested that Universal rectify this default as soon as possible.
?Polo advised this default by Universal arises as a result of Pan Asia not yet having convened a shareholder?s meeting to seek approval for the transfer of Pan Asia?s (100%) shares in Innovation West Mantewe Pte Ltd (the holding company of Pan Asia?s entire 75 percent interest in the Transcoal Minergy/TCM project in South Kalimantan) under the terms of Sale and Purchase Agreement entered into between Universal and Pan Asia,? Pan Asia said in the statement.
Polo entered into a secured S$5 million convertible loan agreement with Universal last year as the latter company was planning to list on the Singapore Stock Exchange. The convertible loan agreement entitles Polo to convert the principal outstanding plus any accrued interest into not less than 20 percent of the share capital of Universal as enlarged by such conversion at any time up to 18 months from drawdown, or earlier upon the receipt of approval in principle to list.
Pan Asia entered into a definitive share sale and purchase agreement with Universal for the 100 percent sale of Innovation West.
As previously announced by Pan Asia, there are significant preconditions to be met by Universal before this meeting is to be called and the company is seeking to have these fulfilled as a matter of priority to enable the planned meeting to be called expeditiously.
Pan Asia said in the event Universal does not rectify the default, then Polo may seek to exercise any rights under the CLA with Universal and also under the Deed of Share Pledge entered into between Polo and Pan Asia where the company?s interest in the TCM project is pledged as a security.
As previously reported, the company has also been independently approached to sell the TCM project. ?In the event that opportunity materializes on beneficial terms, the company would seek to discuss with Polo the commercial restructuring of the current security provided in support of the current proposed sale of the project to Universal,? Pan Asia said.
TCM Project is a high CV thermal coal project in South Kalimantan. The company seeks to generate significant projects, de-risking them ready for development partners / offtake agreements with quality, life of mine partners.
Editing by Reiner Simanjuntak