AFRICA-focused Jacka Resources is reviewing its asset portfolio and planning a board restructure following the announcement of a capital raising to repay existing lenders.
The company has placed 15.38 million shares at 6.5 cents each to raise $1 million, together with 1 free attaching option for every new share subscribed.
Jacka also plans to launch a non-renounceable entitlement issue, giving shareholders on new share for every eight held, plus one new option for every two new shares subscribed under the issue.
Patersons has agreed to underwrite the entitlement issue, which would raise up to $2.8 million, Jacka said.
After repaying its debts, funds raised will provide working capital to Jacka projects in Nigeria, Tunisia, Tanzania and Somaliland.
The company had intended to use a loan facility provided by Tangiers to repay about 1.7 million owing to the company’s existing lenders, but could not draw down further funds under the loan facility following the collapse of the proposed acquisition.
The $300,000 which Jacka had already drawn down from the Tangiers facility would need to be repaid within 90 days of the capital raising being completed.
“The existing lenders presently remain supportive of Jacka’s capital raising initiatives (and the company has been advised of their agreement to extend the due date for repayment of these existing loans to provide additional time to enable Jacka to complete the capital raising),” Jacka said.
“However, Jacka’s ongoing financial viability ultimately depends upon the company being able to successfully refinance these existing loans within a time period acceptable to the existing lenders as well as raising sufficient working capital to carry out its future objectives.”
The company was suspended from share trade at the time of going to press, saying that trading in its securities was likely to be materially prejudicial to its ability to recapitalise.
The move comes as Jacka moves to restructure its board, following the resignation of Jacka technical director Justyn Wood and the planned resignation of non-executive directors Stephen Brockhurst and Brett Smith after the capital raising is completed.
Jacka plans to reduce its total director numbers to three, with Jacka managing director Bob Cassie to be one of them.
The company also plans to appoint Mr Brockhurst to the role of company secretary, when current company secretary Amanda Wilton-Heald takes extended leave.