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Eastern Goldfields to re-brand as Eris Gold

Squire Patton Boggs has advised Eastern Goldfields on its recapitalisation, as the company works through upheaval and a name change to Eris Gold.

user iconGrace Ormsby 19 November 2018 Big Law
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Firm: Squire Patton Boggs (Eastern Goldfields)

Deal: Squire Patton Boggs has advised Eastern Goldfields on its recapitalisation.

Value: $80 million

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Area: Corporate

Key players: Squire Patton Boggs partner Simon Rear led the deal, with associate Michael Van Der Ende.

Deal significance: Eastern Goldfields announced its first gold pour in July of 2017.

Since then, Squire Patton Boggs says it has faced significant operational and management challenges, and announced its recapitalisation in late September.

“Bringing together new people, through a fresh board and management team, a revised strategy and a balance sheet to execute the strategy,” the firm said recapitalization will “provide the company with a fresh start and position it to join the ranks of successful Australian mid-tier gold producers.”

This will see Eastern Goldfields also take up a name, Eris Gold.

Key aspects of the recapitalisation include an interim funding package that raised $8.75 million through issuance of convertible notes, and a placement and entitlement offer priced at five cents a share to raise $42.3 million.

“A refreshed mining and operational solution involving the provision of in-kind mining services” totaling $15 million to $17.5 million by Adaman resources was also included, according to the firm’s statement, with conversion of all or substantial outstanding amounts owing under a syndicated facility agreement into equity, worth around $9.6 million with further interest accruing.

The recapitalisation has also enabled the elimination of existing trade debts of the company, which has included the conversion of a proportion of the amount owing into equity.

On behalf of the firm, Mr Rear said they “have been pleased to advise EGS on this transformational transaction.”

“The deal has been more complex than most,” he noted, “and has involved extensive discussions and negotiations with interested stakeholders, including existing shareholders and lenders, incoming investors and trade creditors.”

“We look forward to progressing the transaction and completing the recapitalisation so that EGS may execute its strategy of becoming a mid-tier gold producer,” Mr Rear continued.

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