PCGB Power Capital

TIDMPCGB

RNS Number : 5135I

Power Capital Global Ltd

25 July 2012

25 July 2012

Power Capital Global Limited

(the "Group" or "Company" or "PCGB")

Re-structuring of Loan Facilities

and

Update re Proposed TSI Equity Investment

Introduction

The Group has entered into a restructuring of the loan facilities provided to it by Power Capital Forex Management ("PCFX") currently amounting to US$8m (the "PCFX facilities"). PCFX is controlled by Kung Min Lin, the chairman of the Company and its largest single shareholder.

The restructuring:

-- establishes a framework for the addition of new investors in PCGB and an increase in the free float of its shares of up to 18 per cent; and

   --      paves the way for a substantial reduction in the Group's balance sheet gearing. 

Details of the restructuring

US$5m of the amount currently drawn under the PCFX facilities will be re-constituted as 12 month Unsecured Convertible Loan Notes ("CLN's") with the intention that the CLNs will be transferred by PCFX to third party investors. PCFX has confirmed to the Company that it has identified a small group of investors not connected to Kung Min Lin who have indicated that they will acquire the CLNs in the near future.

The terms of the CLNs incorporate a conversion option into PCGB shares exercisable at any time at 20p per share but otherwise mirror so far as possible the terms of the PCFX facilities. In addition, PCGB may at any time mandatorily convert the CLNs or redeem them at par in cash. The conversion option, however, may not be exercised by PCFX or any company under the control of Kung Min Lin or any associate of Kung Min Lin as defined in the AIM Rules.

The conversion price of 20p represents a premium of 25 per cent. over 16p, the current midmarket price of PCGB's shares. Full conversion of the CLNs at current US$: GBP exchange rates would result in the issue of approximately 16.1 million new PCGB shares (an increase of 28 per cent. on the current issued share capital) and an increase in the free float of up to 18 per cent.

The balance of the PCFX facilities not re-constituted as CLNs, amounting to approximately US$3m, will be represented by a new loan facility in favour of the Group but otherwise substantially on the same terms as the PCFX facilities ("the New Loan Agreement"). The New Loan Agreement expires on 25 July 2013.

Related party transaction

The initial holder of the CLNs will be PCFX, a company controlled by Kung Min Lin, the chairman of the Company and its largest single shareholder. Whereas the conversion option may not be exercised by PCFX or any company under the control of Kung Min Lin or any associate of Kung Min Lin as defined in the AIM Rules, the conversion option is deemed a related party transaction under the AIM Rules. The directors, other than Kung Min Lin who has taken no part in the Board's consideration of the CLNs, consider, having consulted with Northland Capital Partners Limited, the Company's Nominated Adviser, that the terms of the CLNsare fair and reasonable so far as the shareholders of the Company are concerned.

Update re proposed TSI equity investment

The Company announced on 12 March 2012 that it had signed a term sheet to subscribe for a 30 per cent. equity stake in TSI Holdings Limited ("TSI") (the "TSI Investment"). The total proposed consideration for the TSI Investment was US$2 million (approximately GBP1.26m) and the subscription was subject to, inter alia, due diligence.

Due diligence has now been concluded and the Company has determined, for the immediate term, to substantially revise the original term sheet. The Company has entered into an investment loan arrangement with TSI which will provide TSI with substantial incremental working, business development, and business expansion capital over a period of approximately six months. It is the intention of both companies, during the duration of the loan period, to review, define and jointly develop new business development opportunities, and both companies continue to share the view that substantial cross-marketing opportunities exist.

The basic terms of the investment loan are summarized as follows. The loan amount is US$1 million and is to be advanced by PCG Engineering Limited, a wholly owned subsidiary of the Company, to TSI on a monthly basis against an agreed schedule. The loan is currently drawn to US$620,000 and additional drawdown amounts are scheduled for July 31st, August 31st and September 30th. The loan term is for two years and carries interest at 5 per cent. per annum.

 
 
  Further information 
 
 Power Capital Global Limited 
 
  Simon Dewhurst                     Tel: +852 3695 5150 
 
 Northland Capital Partners 
  Limited 
 Luke Cairns, Edward Hutton         Tel: +44 (0)20 7796 8800 
 
 GTH Communications Limited 
 Toby Hall, Suzanne Johnson-Walsh   Tel: +44 (0)20 3103 3900 
 

Notes to editors

Power Capital Global Limited is an AIM listed Asia based natural resources trading and logistics business(AIM:PCGB) headquartered in Hong Kong.

PCGB operates under the trading name PCG Resources.

PCGB is actively researching domestic China thermal coal trading business opportunities.

This information is provided by RNS

The company news service from the London Stock Exchange

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