Energem – US$3.6 Million Bridging Loan to Westhouse International Tobacco Holdings Limitedadmin
Energem Resources Inc announces that on 22 October 2008 it advanced a short term bridging loan of US$3.6 million to Westhouse International Tobacco Holdings Limited. The Bridge is repayable on demand and accrues interest at US$ LIBOR plus 3%. The parties intend to renegotiate the terms of the Bridge in due course to put in place a convertible loan with a six month term secured over certain of Westhouse’s assets and including the right to convert into new ordinary shares in Westhouse.
Energem has an existing investment in 7.16% of Westhouse’s ordinary issued shares. Westhouse is an integrated tobacco threshing, cigarette manufacturing, selling and distribution company operating mainly in Africa. The Bridge will be used by Westhouse for working capital purposes which Energem believes will support its existing investment in Westhouse. Given the recent sale of its final stake in its Nigerian oil storage facility, Energem continues to have a strong cash position following the provision of the Bridge to Westhouse.
Energem is currently discussing with Westhouse the terms of an equity investment into Westhouse. If concluded this investment may result in the Energem group holding a controlling interest in Westhouse. The maximum cost of this investment would be approximately US$12 million inclusive of the $3.6 million Term Loan, if converted. The actual amount of the equity investment would be dependant on the extent of the take-up by other existing shareholders of Westhouse.
Such investment is subject to finalisation of terms satisfactory to Energem with Westhouse and its other shareholders, such regulatory and other approvals as may be required and the completion of such due diligence on Westhouse as is deemed necessary by Energem.
This news release contains forward-looking statements which address future events and conditions which are subject to various risks and uncertainties. The actual results could differ materially from those anticipated in such forward-looking statements as a result of numerous factors, some of which may be beyond the Company’s control. These factors include: the availability of funds; the costs and availability of product; fluctuations in fuel product sale prices; currency fluctuations; changes in production costs; fluctuation in shipping costs; availability of shipping; general market and industry conditions; political and regulatory instability and risks associated with rights to title and ownership of assets.
Forward-looking statements are based on the expectations and opinions of the Company’s management on the date the statements are made. The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.
Energem Resources Inc (TSX/AIM:ENM). is an Africa focussed company listed on the Toronto Stock Exchange and on the London Stock Exchange’s AIM market and the holding company of a group of companies engaged in, mainly, several African countries in the bio-fuels, oil and related sectors including logistics and supply to the mining industry in South and Central Africa and development of an up-stream oil exploration asset. The Company has offices and/or logistics and support infrastructure in Johannesburg, London and a number of African countries.