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Oxus Gold completes US$18.5 mln convertible loan notes restructuring

Oxus Gold (AIM: OXS) said that the restructuring of its existing convertible loan notes has been completed after the company signed an agreement with the CITIC Group consortium to provide up to US$185 million in financing.

The convertible loan notes in the principal amount of US$18.5 million were issued in May 2008 and were convertible into ordinary shares in Oxus at 37 pence per share, earned interest at 8% pa (per annum) and were repayable in May 2010. The notes are now convertible at 12 pence per share, earn interest at US LIBOR (London Interbank Offered Rate) + 3% per annum, while the repayment deadline has been extended to May 2013.

Oxus entered into conditional agreements with a consortium of Chinese investors earlier this month to invest and arrange financing of a total aggregate amount of US$185 million to help develop the company's gold project in Uzbekistan and increase production to 0.3 Moz (million ounces) of gold annually after 2011.

Under the terms of the financing, members of the concert party will make an investment in Oxus of US$85 million through an issue of new ordinary shares and convertible loan notes and will be granted warrants to subscribe for new shares in the company for US$20 million in return for an undertaking to arrange a further minimum of US$80 million in project finance.

Disclosure: The author holds no positions in the company