Banro and Barbados-based units’ CCAA plan filing accepted by court

By Caroline Salls

Pittsburgh, Feb. 1 – Banro Corp. and its Barbados-based subsidiaries announced Thursday that their consolidated plan of compromise and reorganization was accepted for filing by the Ontario Superior Court of Justice in connection with the companies’ restructuring proceedings under the Companies’ Creditors Arrangement Act.

Banro said this filing marks a major milestone in the court-supervised restructuring process.

In connection with filing of the plan, the court also authorized meetings of creditors to be held on March 9 to consider approval of the plan and established a claims procedure to determine claims against the companies that are to be affected by the plan and to identify and determine all claims against the directors and officers of the companies.

Claims against the directors and officers must be received by court-appointed monitor FTI Consulting Canada Inc. by 5 p.m. ET on March 6.

The companies said they will proceed with the plan if no superior transaction is identified and implemented under a previously announced sale and investment solicitation process (SISP), which is currently underway.

Banro said the plan provides for the exchange of some parity-lien debt for all of the equity of restructured Banro. subject to dilution on account of equity warrants to be issued in connection with the plan and associated transactions, the compromise of unsecured claims at Banro for nominal consideration and the cancellation all existing equity of Banro and any and all equity-related claims.

In addition, concurrent with the implementation of the plan, the company said amendments to some priority-lien debt and streaming obligations held by Baiyin International Investment Ltd. and Gramercy Funds Management LLC, including deferrals or partial forgiveness of obligations, will continue, conditional upon the implementation of the plan.

Banro said the plan is designed to restructure the companies’ business to preserve its mining assets and allow the companies to continue normal operations in the Democratic Republic of the Congo.

Based on discussions with key stakeholders, the companies expect there to be sufficient support from the affected creditors for the plan to be approved by the required majorities, according to the release.

If the plan is approved by the creditors, Banro said it intends to bring a motion before the court on March 16 seeking a sanctioning of the plan by the court.

If a letter of intent is received in accordance with the SISP that forms the basis of a qualified alternative transaction bid, Banro said it will adjourn the creditors’ meetings to allow the SISP to continue.

Banro is a Toronto-based gold mining company focused on its Twangiza and Namoya mines with plans to develop two further projects at Lugushwa and Kamituga. All are in the Democratic Republic of the Congo.

It began restructuring proceedings under Canada’s Companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice on Dec. 22.

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