KWG Update:
The Financial Post reports in its Tuesday, January 13, edition that
Icelandic Gold, one of the companies stung in the collapse of the St
Genevieve group of junior resource companies says improper borrowings from
its account totalled "vastly more" than the $400,000 first reported. The
Post's Paul Bagnell writes that Icelandic will likely sue St Genevieve
Resources if the missing money is not repaid in full by January 30.
Icelandic, which trades on the Canadian Dealing Network, was one of three
companies that had money taken out of its accounts, without its knowledge.
The company is not an affiliate of St Genevieve, but had agreed to let the
firm administer some of its Canadian financial affairs. St Genevieve and
sister company KWG Resources both filed for creditor protection in late
November, the same time two junior affiliates revealed they had suffered
unauthorized borrowings from their bank accounts. The companies were
Genoil, which is now owed $5.2 million by St Genevieve and Emerging Africa
Gold, which is owed $15.3 million.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
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Mon 26 Jan 98 News Release
Mr Jacques Rossignol reports
St Genevieve Resources and KWG Resources have filed their joint
restructuring plan under the Companies' Creditors Arrangement Act.
The joint restructuring plan has as its main objective the sharpening of
focus on key projects and the generating of sufficient funds to continue
operations.
In an effort to sharpen their focus the companies have decided to
concentrate their efforts on two core projects, the Ametistovoe project in
the Russian Federation and the Grand Bois project in the Caribbean.
Non-strategic investments held by both companies will be divested when
conditions are favourable. To date, KWG has sold its 8,000,000 subordinate
voting shares of Joutel Resources, for consideration of $400,000 as well as
50% of its 49% option on Falconbridge's Managua concession in the Dominican
Republic, for consideration of $1,075,000. In addition, a restructuring of
the management team will be undertaken and new board members will be
submitted to shareholders for election.
Creditors of SGV, with the principal exceptions of its bank and its related
companies, Genoil and Icelandic Gold, will be asked to convert their debts,
amounting to approximately $28.1 million, into shares of SGV on the basis
of one share for every $0.20 of debt. One of such creditors, a related
company, Emerging Africa Gold, which is owed approximately $15 million, has
indicated that it intends to, in turn, dividend to its shareholders the
shares of SGV that it will so acquire. The remaining creditors of SGV
holding claims totalling approximately $6.5 million (principally SGV's
banker, Genoil and Icelandic) will be paid in full.
Creditors of KWG (including SGV at approximately $8 million and creditors
of various wholly owned subsidiaries for which debts have been assumed by
KWG but excluding some creditors representing minor amounts) will be asked
to convert their debts, amounting to approximately $14.9 million, into
shares of KWG on the basis of one common share for every $0.40 of debt.
Assuming the acceptance of the plan by creditors, the issued and
outstanding share capital of SGV would increase from approximately
86,000,000 shares to approximately 200,000,000 shares and the outstanding
share capital of KWG would increase from approximately 36,000,000 shares to
approximately 73,250,000 shares.
Assuming the acceptance of the plan by the creditors, SGV and KWG, which
will then be largely debt free, will launch rights issues pursuant to which
each shall issue to its respective shareholders, rights to subscribe to
additional shares in its capital stock. Negotiations with various parties
are under way with a view to backstopping all or part of these rights
issues.
The rights offerings, should they be fully subscribed, would generate gross
proceeds to SGV and KWG in excess of $30 million. These funds will be used
to settle remaining current indebtedness of SGV and KWG and to provide
working capital.
Creditors are scheduled to vote on the joint restructuring plan in Montreal
on February 26 1998.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com
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Mon 26 Jan 98 In the News
See St Genevieve Resources Ltd (SGV) In the News
The Globe and Mail reports in its Saturday, January 24, edition that Ste
Genevieve Resources is asking creditors to exchange their debt for stock in
the company and subscribe to a $30 million rights offering under a
restructuring plan presented Friday in Quebec Superior Court. The Globe's
Konrad Yakabuski writes that the plan requires the approval of at least two
thirds of each class of creditors, who must vote on the proposal at a
meeting to be held on or before February 27. Ste Genevieve and 17 per cent
owned KWG Resources obtained court protection after disclosing that $22
million in unauthorized transfers were made from affiliated companies to
KWG. Most of the funds were invested in KWG's Ametistovoe gold and silver
deposit in Russia. Under the restructuring plan Ste Genevieve would, repay
in full the $5.2 million it owes 26 per cent owned Genoil and the $500,000
owed to 10.5 per cent owned Icelandic Gold immediately upon court approval
of the plan.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com |
