Intrepid to receive US$80m in settlement of Indonesian disputes
Wednesday, February 19 2014 - 09:50 AM WIB
ASX-listed Intrepid Mines Limited announced Wednesday that it has signed binding agreements to settle all disputes surrounding the ownership of the Tujuh Bukit copper/gold project in Indonesia, which will result in the company receiving US$80 million (about A$90 million) in cash.
The agreements, which Provident Capital and Saratoga Capital brokered on behalf of the parties with whom Intrepid has been in dispute, are binding and subject only to Intrepid shareholder approval being obtained at a general meeting expected to be held in early April 2014, the company said in a statement.
To effect the proposed settlement, two binding agreements and a range of ancillary documents have been signed.
A deed of settlement has been signed by all of the parties involved in the ownership dispute, including Intrepid?s former Indonesian partners, PT Indo Multi Niaga (IMN), Maya Ambarsari, Reza Nazaruddin and Paul Willis. Under this deed, all parties have agreed to settle the disputes between them, including those that are the subject of arbitration proceedings brought by Intrepid in Singapore and the dispute between the company and IndoAust Limited, IndoAust Pty Ltd and Paul Willis which is before the Indonesian courts.
Under the Master Settlement Deed, Emperor Mines Pty Ltd, a wholly-owned subsidiary of the company, will exchange a US$70 million promissory note issued by IMN in settlement of Emperor?s claims against IMN, Maya and Reza for a bond which is convertible into a 15 percent pre-IPO shareholding in PT Merdeka Serasi Jaya (MSJ), the current holding company for the companies holding the Tujuh Bukit mining tenements.
The convertible bond is exercisable upon the IPO of MSJ. However, the controlling shareholders of MSJ have advised Intrepid that neither the timing nor the jurisdiction of that listing have yet been finalized.
Emperor has also been granted the right to pay US$37.5 million to acquire 7.5 percent of the shares in MSJ at the time of the proposed IPO. Settlement under the Master Settlement Deed will occur automatically following the passing by Intrepid shareholders of the ordinary resolution approving the transaction, referred to below.
A deed of assignment has also been signed under which Intrepid and Emperor have sold and assigned all of their rights under the Master Settlement Deed, including the convertible bond and the option, to Kendall Court Resource Investments Ltd (KCR), a company associated with the Singapore-based funds manager Kendall Court (sale agreement).
The purchase price payable by KCR is US$80 million (about A$90 million).
KCR?s obligations under the sale agreement have been secured by:
- payment of a US$40 million cash deposit into an independently controlled escrow account; and
- the provision by DBS Bank in Singapore of a Standby Letter of Credit for US$40 million in favor of Emperor.
?The board of directors of Intrepid has unanimously resolved to recommend that the company?s shareholders vote in favor of the proposed settlement at the forthcoming general meeting,? Intrepid said in the statement.
Editing by Reiner Simanjuntak