Jinyu (H.K.) International Mining provides a $38 million AUD loan to Norton Gold Fields to facilitate Zijin Mining's acquisition of Norton shares by enabling it to repay maturing debt (Linked to Record ID#93942, #93972, and #93973)

Project narrative

In April 2012, Chinese state-owned mining company Zijin Mining Group Co., Limited proposed to purchase all the shares of Norton Gold Fields Limited (NGF), an Australia gold explorer and producer, for $0.25 AUD per share. Then, on May 31, 2012, Norton announced that it had decided a recommend to shareholders to accept an all-cash off-market takeover offer from Zijin through Zijin's wholly owned subsidiary Jinyu (H.K.) International Mining Company Limited for all Norton shares it did not already control for $0.25 AUD per share while Norton shareholders to retain a special unfranked dividend of $0.02 AUD per share that Norton would prose to declare and pay. At the time of the proposed acquisition, Zijin already owned 16.98% of Norton's shares. To facilitate this acquisition — specifically, to allow Norton to repay its existing $80 million AUD secured note facility that featured "change of control" provisions that would be triggered, forcing Norton to repay the entire amounting loan amount and a redemption premium of in the amount of 5% of outstanding under the loan, if any entity obtained more than 45% of Norton's shares, if a takeover bid for Norton became unconditional and either the bidder had more than a 45% interest or Norton or the Norton board unanimously recommended the bid — on May 31, 2012 Jinyu (H.K.) International Mining Company Limited signed a $38,000,000 AUD unsecured bridging term loan facility agreement with Norton to pre-pay all outstanding loan amounts under the existing facility. This loan carried an interest rate of 11.0% per annum payable on the last day of each month in arrears, an upfront non-refundable fee of $100,000 AUD, was available by way of single drawdown, and a termination/repayment date (maturity) of 12 months after the drawdown date. The facility could be cancelled or become payable before the termination date in the following circumstances: the offer closes without either the offer becoming or been declared unconditional or without Zijin acquiring more than 45% of Norton shares; the offer was withdrawn; an announcement that the offer would not proceed based on Section 670F of the Corporations Act; or a person other than Zijin and its entities acquires an interest greater than 50% in Norton, in which cause Norton would have to repay the facility by the earlier of the six months from that acquisition date or the termination. Furthermore, in the event Norton incurred financial indebtedness beyond its permits, Zijin could force Norton, with 10 days notice, to prepay the facility equal to the proceeds of the financial indebtedness. The loan had an availability period from the date of the offer (July 18, 2012) and ending on the date the last of the following occurred: the day that is three weeks after the earlier of the date Norton was required to prepay the existing facility due to the change of control trigger or the offer being declared condition; the date on which the offer closed without having become or been declared unconditioned; the date the offer was withdrawn; the date of the termination of the bid implementation date; or the date on which the commitment us fully utilized or any unutilized portion is cancelled. The loan carried several covenants and restrictions on Norton’s operations. Norton's ability to drawn down under the facility was subject to the following conditions, without limitation: Norton had to provide Zijin a verification certificate attaching a copy of extracts of minutes of the directors approving the facility; Zijin had to receive a legal opinion from its legal advisors substantially in the same form provided to Zijin prior to the execution of the drawdown of the facility; Norton had to remain in compliance with covenants under the facility; Norton had to provide a copy of any regulatory approval or other authorization considered necessary by Zijin in connection with its entry into and performance of the transaction contemplated under facility; and Norton had to provide evidence that the existing facility would be fully repaid by the new facility and all securities under the existing facility were released. On August 1, 2012, Jinyu notified NGF that it had obtained a relevant interest in 47.27% of Norton shares. As a result, the change of control provision was triggered and Norton had to repay the existing debt facility using the $38 million AUD loan and its existing cash reserves. On August 2, 2012, Jinyu announced that, after its offer, it had ended up holding 48.29% of shares in Norton. By the close of the bid in August 2012, Zijin had reached a 89.15% interest in Norton. On November 22, 2012, the Perth Branch of the Industrial and Commercial Bank of China (ICBC) signed a $105 million USD credit facility agreement with Norton Gold Fields Limited (NGF). The proceeds of this loan were used, in part, to repay the $38 million AUD loan from Jinyu. Record ID#93942 captures the $105 million USD loan. Then, in December 2014, Norton entered a $120 million AUD loan with ICBC and the Agricultural Bank of China Limited (ABC) to repay the $105 million USD loan facility. ICBC's contribution to the $120 million AUD loan is captured by Record ID#93972 and ABC's contribution is captured by Record ID#93973.