Banro defers December interest payment

VANCOUVER (miningweekly.com) – Democratic Republic of Congo- (DRC-) focused miner Banro Corp has decided to defer an interest payment of $4.94-million that was due on Friday for up to 30 days.

Under the terms of the indenture governing the 10% notes due 2021, no event of default will occur if the interest payment is made within 30 days of the due date.

Banro advised that it would use the grace period to continue its discussions with its major stakeholders regarding a possible restructuring of the company's non-DRC debt obligations, as well as provide financing to support the company's operations in the DRC. 

It cautioned that there is significant risk that any restructuring of the company's non-DRC debt obligations may result in significant impairment to the value of the equity holders' interests in the company. 

Banro also warned that it continues to face significant ongoing, operational and financial challenges, including short and long-term liquidity constraints. It is taking all steps necessary to ensure the continuity of its operations in the DRC.

The company has had a dismal year in the DRC, as political instability and insurgent violence have resulted in employees being killed at the Twangiza gold mine, in eastern DRC, while it recently suspended operations at its Nomoya mine, owing to an ongoing illegal road blockade.

Meanwhile, the TSX has started a review to determine whether Banro continues to meet minimum listing requirements. The company’s equity has been suspended from trading since November 20. The company has also failed to release its interim operational and financial results for the quarter ended September 30.