Trans-Siberian Gold plc (TSG.LN), a low cost, high grade gold producer in Russia, is pleased to confirm that the Company’s wholly owned subsidiary ZAO Trevozhnoye Zarevo (“TZ”) has entered into a loan facility agreement with VTB Bank (“VTB”).
In accordance with the terms of the agreement, as announced on 3 May 2019, VTB will provide TZ with debt facilities (the “New Facilities”) in an amount equal to ₽ 800 million (approximately £9.4 million) for a four-year term. The annual interest rate payable under the New Facilities is 10.7%, in line with market rates for Rouble denominated loans in Russia, reflecting the Central Bank of Russia’s key lending rate currently standing at 7.75% per annum, and, as of April 2019, the annual rate of inflation at 5.1%.
As previously announced, the New Facilities are expected to be utilised by TZ to repay part of its indebtedness to the Company. The Company will in turn utilise the funds received from TZ to finance the buyback of 22,894,565 existing shares from two of the Company’s major shareholders; UFG PE Fund I LP and Destin Investment Management Limited and to pay associated costs and expenses.
The Board has carefully evaluated financing options available for the Buyback and has taken into consideration the resulting debt leverage of the Group, which the Board deems to be a prudent and optimal long-term capital structure for TSG.
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Arden Partners plc
Paul Shackleton / Alex Penney (Corporate Finance)
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Hudson Sandler (Financial PR)
Charlie Jack / Katerina Parker
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TSG is focused on low cost, high grade mining operations and stable gold production from its 100% owned Asacha Gold Mine in Far East Russia. The Company also holds the licence for the development and exploration of the Rodnikova deposit, one of the largest gold fields in South Kamchatka.