Akobo issues NKr25.3m unsecured convertible loan

Scandinavia-based gold developer Akobo Minerals, which owns and operates the Segele gold mine, in Ethiopia, has issued an unsecured convertible loan totalling NKr25.3-million with contributions from both new and existing investors, acting as lenders.

Akobo itself is the borrower of this loan. The board of directors and management of Akobo contributed NKr3.6-million to the loan total.

The loan has a term of 24 months with a yearly interest rate of 20%. It includes an option for conversion into shares of the company, either at the discretion of individual lenders or the company, or automatically at the maturity date, pending approval by Akobo shareholders at an upcoming general meeting.

The conversion price, if the loan is converted prior to maturity, is determined by specific conditions.

One conversion price option is associated with the release of each quarterly financial report. At that time, the conversion price will be set at the volume-weighted average price (VWAP) per share on the Euronext Growth Oslo exchange over the 30 consecutive trading days preceding the report release, with a 15% discount applied.

The first possible date for conversion will follow the company’s fourth-quarter report for this year.

Additionally, if Akobo issues more than 5% in new shares, the conversion price will be set at the price of the new share issue, with a 15% discount applied.

If the company initiates conversion of the loan within the first six months, lenders will receive a minimum of six months’ accrued interest, converted at the applicable discounted price.

At maturity, if conversion occurs, the conversion price will be the VWAP per share on Euronext Growth Oslo over the 30 consecutive trading days preceding the maturity date, discounted by 15%.

Should Akobo be unable to issue the required shares to lenders at conversion, the company will have to repay the loan in full, including accrued interest.