Watson Farley & Williams (“WFW”) advised long-term client Chaarat Gold Holdings Limited (“Chaarat”) on the US$19.8m recapitalisation of all interest and fees owed on its existing convertible loan notes, the extension of the loan note maturity date and the provision of a new US$5m working capital facility.
The recapitalisation enables Chaarat to reduce its existing liabilities by over 50% to under US$20m and provides working capital for the company to continue its focus on maximising the value of its assets in the Kyrgyz Republic. Existing debt arrangements are being updated to enable further issues of up to US$5m of additional convertible loan notes until December 2025, with funds to be provided by a group of nine existing noteholders. As part of the recapitalisation, Chaarat is to be delisted from AIM. The recapitalisation, the provision of the working capital facility and the delisting are conditional on (amongst other things) Chaarat shareholder approval.
Chaarat is an exploration and development mining company whose main resource is the 7m ounce high grade Chaarat Gold Project in the Kyrgyz Republic.
The multidisciplinary WFW London team advising Chaarat was led by Partner and Global Mining & Commodities Sector Co-Head Jan Mellmann, working closely with Financial Markets & Products Partner Rob McBride, Restructuring and Insolvency Partner Stephen Parker, Senior Associate Clementine Freeth and Associate Chris Madoc-Jones.
Jan Mellmann commented: “We have been advising Chaarat since prior to its AIM IPO in 2007 and are glad to see that this recapitalisation enables it to continue to focus on maximising the value of its Kyrgyz gold mining assets. This transaction demonstrates our ability to apply our corporate, finance and restructuring skillsets to implement transactions such as this in the mining and commodities sector within short timescales”.
Davis Mackenzie, acting CEO of Chaarat, commented: “The Chaarat board and I have been very impressed with WFW’s considerable help and support over the past few months. We are appreciative of the work they did and their calmness and responsiveness. They ensured the process was run smoothly throughout and proactively engaged with us to ensure a challenging process was successfully completed in a timely manner”.
Jan and the team previously advised Chaarat on the initial issuances of the existing convertible loan notes in 2017 and 2018 respectively to develop its Chaarat Gold Project in the Kyrgyz Republic.
