Landore and Lamaune reach debt settlement agreement
(ShareCast News) - Landore announced on Wednesday that its wholly owned subsidiary, Landore Resources Canada, had entered into a debt settlement agreement with Lamaune Iron.
The AIM-traded firm said that, pursuant to the debt settlement agreement, Lamaune had agreed - conditional on its own shareholder approval - to issue to Landore Canada 576,192,087 common shares in the capital of Lamaune, in full satisfaction of the loan receivable from Lamaune.
Following the issue of the shares, Landore Canada will hold 90.2% of the issued shares of Lamaune.
"In June 2011, Landore demerged certain of its mining claims and assets relating to the Lamaune iron ore and gold deposits by means of a distribution in specie of the entire issued share capital of Lamaune to the then current shareholders of Landore and the transfer of the Lamaune Assets to Lamaune from Landore Canada," the Landore board said in its statement.
"Prior to effecting the original transaction, Lamaune - which had been formed specifically for purposes of the original transaction - was a wholly-owned subsidiary of Landore."
It said the purchase price for the transfer of the Lamaune Assets to Lamaune was CAD 6.2m, which was satisfied by the issuance of a promissory note by Lamaune and secured by a loan agreement and security agreement between Lamaune and Landore Canada.
In connection with the original transaction, Landore also agreed to make a loan facility available to Lamaune for working capital requirements.
"The debt settlement agreement is subject to the receipt of approval by shareholders of Lamaune at a special meeting of Lamaune to be held on 11 October, for which a circular is expected to be posted to Lamaune shareholders on 14 September," the Landore board said in its statement.
"A further announcement will be made following this meeting."