Angkor Resources Corp. (TSXV: ANK, OTC: ANKOF) has announced a shares-for-debt transaction to settle an aggregate debt of $1,922,800 owed to various creditors. The move aims to strengthen the company's balance sheet by reducing its debt burden and lowering interest expenses, allowing management to focus on core business initiatives.
Under the terms of the transaction, subject to TSX Venture Exchange approval, the company will issue a total of 8,263,333 units at a deemed price of $0.21 per unit. Each unit consists of one common share and one-half share purchase warrant. Each full warrant entitles the holder to purchase one common share at $0.30 for 24 months from issuance, subject to an acceleration clause: if the company's shares trade at $0.40 or above for 10 consecutive trading days, a forced exercise provision will take effect.
Additionally, the company will settle $187,500 through the issuance of common shares at $0.21 per share to related parties, including directors, officers, and management. These shares do not include warrants. The total debt being cleared originates from five sources: loans of $471,300 (principal and interest on three facilities), a principal payment of $400,000 on the Evesham acquisition loan, amounts due to a 30% participating partner from the Oyadao North license sale, notes payable and conversions of $875,000 from the 2022 gas capture project in Evesham, Saskatchewan, and compensation of $62,500 to management and contractors.
Grant T. Smith, CFO of Angkor, commented, “I am very pleased to announce the successful settlement of $1,922,800 of debt through the issuance of common shares. This strategic move significantly improves our balance sheet by reducing our debt burden and lowers our interest expense. With this debt out of the way, we can now focus our resources and efforts on driving our core business initiatives and achieving our long-term goals. This transaction reflects our strong belief in the future of Angkor and our commitment to enhancing shareholder value.”
The transaction involves related parties, making it a related party transaction under Multilateral Instrument 61-101. However, Angkor is relying on exemptions from formal valuation and minority approval requirements. Specifically, the company is exempt from formal valuation under Section 5.5(b) as it is not listed on a specified market, and from minority approval under Section 5.7(1)(a) because the fair market value of the transaction involving interested parties does not exceed 25% of Angkor's market capitalization.
Closing is subject to TSX Venture Exchange approval and customary conditions. The common shares issued will be subject to a four-month-and-one-day hold period under applicable securities laws.
Angkor Resources Corp. is a resource optimizer with operations in Cambodia and Canada. The company holds mineral exploration licenses in Cambodia, an onshore oil and gas license (Block VIII) in Cambodia, and is involved in carbon capture and gas conservation in Saskatchewan.
