Banro debt-for-equity restructuring approved by court – by Niall McGee (Globe and Mail – March 29, 2018)

An Ontario court has approved a restructuring plan for beleaguered junior Canadian gold company Banro Corp., paving the way for it to emerge from creditor protection.

Under the terms approved by the Ontario Superior Court of Justice, holders of US$207.5-million in debt instruments and US$20-million in gold-forward agreements will swap their securities for equity in a revamped Banro. Additional obligations under gold-forward agreements worth US$30.9-million will be deferred for a number of years. (A gold forward is an agreement to sell a portion of gold at a set price in the future.)

Banro’s existing common shareholders are set to be completely wiped out. In November, trading in the shares was suspended on the Toronto Stock Exchange; the stock was delisted in January.

In a release on Tuesday, the Toronto-based company, which operates two gold mines in the Democratic Republic of Congo (DRC), said the development “significantly reduces debt, improves liquidity, and allows the Banro Group to continue ongoing operations in the DRC.”

In December, Banro was granted protection from creditors under the Companies’ Creditors Arrangement Act (CCAA), with its chief financial backers Gramercy Funds Management, a Connecticut-based hedge fund, and Chinese investment fund Baiyin International Investment, owed about US$319-million.

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