An Amaroo Blackdown Investments recapitalisation plan proposed to Bounty Mining has been rejected in a shareholder vote at a general meeting.
The proposal was knocked back yesterday in a landslide defeat, with 81 per cent of Bounty shareholders voting against the plan.
Bounty and Amaroo’s next steps remain unclear as Bounty has not met its free cash flow covenant under the terms of the previous loan facility agreement with Amaroo.
According to the agreement, Amaroo can require Bounty to repay the outstanding loan within 30 days of default of the covenant.
An extension was granted to Bounty pending the shareholder vote which has just passed.
Bounty has alternative refinancing proposals from QCoal Group. However, there are conflicting reports regarding QCoal’s proposal.
The funding package would be used for the company’s Glencore asset sale agreement, mine improvements and mine optimisation.
QCoal’s offer is an $85 million binding and unconditional offer for secured finance and guarantee facility, which is “superior to the Amaroo proposal”.
The offer includes a $60 million cash facility, which would result in liquidity for the company and does not rely on future contingent events to occur.
QCoal has claimed that the Amaroo proposal has the potential to be highly dilutive to shareholders, delivering control of Bounty to Amaroo, while QCoal’s proposal is not dilutive.
Amaroo’s refused proposal would have provided finance of $70.9 million, including an existing working capital facility of $35 million, an existing loan of approximately $930,000 and a secured convertible note facility of up to $35 million.