RFW Banro Investments Limited

February 01, 2017 08:25 ET

RFW Banro Investments Limited Announces Update to its Early Warning Reports in Connection with Recapitalization Transactions of Banro Corporation

TORTOLA, BRITISH VIRGIN ISLANDS--(Marketwired - Feb. 1, 2017) - RFW Banro Investments Limited ("RFW") today announces, in accordance with National Instrument 62-103 of the Canadian Securities Administrators and in connection with the filing by RFW of an update to its "early warning" report in respect of Banro Corporation ("Banro") dated February 26, 2016, that it, or its affiliates, will acquire upon the implementation of the Plan (as defined below) direct or indirect beneficial ownership, subject to satisfaction of a number of conditions, in an additional 278,138,715 common shares of Banro ("Common Shares") pursuant to a support agreement (the "Support Agreement") entered into by RFW in respect of a plan of arrangement of Banro under the Canada Business Corporations Act to effect a comprehensive recapitalization transaction (the "Plan"). A copy of the Support Agreement and Banro's news release describing the Plan in more detail has been be filed by Banro on SEDAR at www.sedar.com.

Currently, and prior to implementation of the Plan, RFW has direct or indirect ownership of 50,000,000 Common Shares, representing approximately 16.48% of the outstanding Common Shares. In addition, RFW has direct or indirect ownership of (i) warrants ("Warrants") to acquire an additional 7,500,000 Common Shares and (ii) US$20 million of preferred shares issued by two Barbados subsidiaries of Banro ("Exchangeable Preferred Shares"), which are exchangeable for 29,256,766 Common Shares at a strike price of US$0.5673 per Common Share. If RFW were to exercise such Warrants and exchange such Exchangeable Preferred Shares prior to completion of the Plan, RFW would hold, directly or indirectly, an aggregate of 86,756,766 Common Shares, or approximately 25.5% of the issued and outstanding Common Shares on a partially diluted basis. This is calculated on the basis that there would be, prior to completion of the Plan, 340,239,102 Common Shares issued and outstanding (comprised of the currently issued and outstanding 303,482,336 Common Shares, plus (i) the 7,500,000 Common Shares issuable on the exercise of the Warrants and (ii) the 29,256,766 Common Shares issuable on the exchange of the Exchangeable Preferred Shares).

Subject to the terms and conditions of the Plan and the Support Agreement, upon implementation of the Plan RFW would have direct or indirect ownership of 328,138,715 Common Shares, representing approximately 29.87% of the 1,098,578,116 Common Shares expected to be outstanding following completion of the Plan. If RFW were to exercise its 7,500,000 Warrants following completion of the Plan, RFW would hold, directly or indirectly on a partially diluted basis, an aggregate of 335,638,715 Common Shares, or approximately 30.34% of the issued and outstanding Common Shares. This is calculated on the basis that there would be, following to completion of the Plan and the exercise of such Warrants, 1,106,078,116 Common Shares issued and outstanding (comprised of the post-completion 1,098,578,116 issued and outstanding Common Shares, plus the 7,500,000 Common Shares issuable on the exercise of the Warrants).

The 278,138,715 Common Shares proposed to be acquired by RFW, subject to the terms and conditions of the Plan and the Support Agreement, upon implementation of the Plan would be acquired in full or partial consideration of the exchange by RFW of certain debt and equity instruments of Banro and its subsidiaries, including the Exchangeable Preferred Shares, held by RFW or its affiliates or expected to be acquired by RFW pursuant to the terms of the Plan.

In addition, pursuant to the Plan and subject to the terms and conditions thereof and of the Support Agreement, RFW has agreed to purchase for cash of up to $50 million in principal amount of 10.00% senior secured notes of Banro due March 1, 2017 ("Existing Notes") and to exchange any Existing Notes so purchased under the Plan for a combination of new senior secured notes of Banro and Common Shares. If RFW were to acquire the maximum $50 million principal amount of Existing Notes pursuant to such cash purchase under the Plan, it would acquire direct or indirect ownership of a further 28,755,724 Common Shares, bringing its total direct or indirect ownership of Common Shares to 356,894,439, representing approximately 32.49% of the 1,098,578,116 Common Shares expected to be outstanding following completion of the Plan.

Resource FinanceWorks Limited, Baiyin International Investment Limited and affiliates thereof within the direct or indirect control of Baiyin Nonferrous Group Company, Limited are joint actors with RFW in connection with the disclosure required by this press release.

Other Information

RFW proposes to acquire, subject to the terms and conditions of the Plan and the Support Agreement, direct or indirect ownership of the Common Shares that are the subject of this release for investment purposes.

RFW has no current plans or future intentions which relate to or would result in any of the matters enumerated in paragraphs (a) - (k) of Item 5 of the report on Form 62-103F1 being filed connection with the matters disclosed in this release.

Notwithstanding the foregoing, in connection with the investment by RFW in the Common Shares, RFW may engage in communications with members of management and the board of directors of Banro, other current or prospective shareholders, industry analysts, existing or potential strategic partners or competitors, investment and financing professionals, sources of credit and other investors with respect to Banro. RFW intends to review its investment in Banro on a continuing basis. Depending on various factors including, without limitation, Banro's financial position, the price levels of the Common Shares, conditions in the securities markets and general economic and industry conditions, RFW's business or financial condition and other factors and conditions RFW deems appropriate, RFW may in the future take such actions with respect to its investment in Banro as RFW deems appropriate including, without limitation, seeking additional board representation, making proposals to Banro concerning changes to the capitalization, ownership structure or operations of Banro, acquiring additional Common Shares, and/or selling or otherwise disposing of some or all of their Common Shares. In addition, RFW may formulate other purposes, plans or proposals regarding Banro or any of its securities to the extent deemed advisable in light of general investment and trading policies, market conditions or other factors or may change its intention with respect to any and all matters referred to in Item 5 of the report on Form 62-103F1 being filed connection with the matters disclosed in this release.

Except as specifically indicated in this press release, neither the issuance of this press release in connection with the matters disclosed herein nor the anticipated filing by RFW of the corresponding "early warning" report required to be filed in accordance with applicable Canadian securities laws is an admission that an entity named or otherwise referred to in this press release owns or controls any described securities or is a joint actor with another entity named or otherwise referred to in this press release.

RFW's address and other contact information is set forth below. For further information, including to obtain a copy, once filed, of the "early warning" report required to be filed in accordance with applicable Canadian securities laws, contact RFW at the address specified below.

RFW Banro Investments Limited
Nemours Chambers, Road Town
Tortola, British Virgin Islands

Contact Information

  • Clement Kwong, Director
    +85295459299
    clement@resourcefinance.works