TORONTO, ONTARIO -- (Marketwire) -- 03/27/13 -- Banro Corporation ("Banro" or the "Company") (TSX: BAA)(NYSE MKT: BAA)(NYSE Amex: BAA) announces that it intends to seek to raise up to US$100 million comprising:
-- the issue of preferred shares, for gross proceeds of US$30 million, to BlackRock World Mining Trust plc ("Blackrock") by way of a private placement (the "Preferred Share Private Placement");-- the issue of preferred shares, for gross proceeds of US$30 million - US$50 million, by way of a marketed offering (the "Preferred Share Offering") pursuant to a preliminary short form prospectus (the "Preliminary Short Form Prospectus"); and-- the issue of common shares in the capital of the Company ("Common Shares"), for gross proceeds of the Canadian dollar equivalent of US$20 million - US$40 million, by way of a marketed offering (the "Common Share Offering") pursuant to the Preliminary Short Form Prospectus.
Preferred Share Private Placement
The Company has received a non-binding commitment from BlackRock to complete a brokered private placement of US$30 million of gold-linked preferred shares of Banro, subject to aggregate proceeds of not less than US$100 million being raised pursuant to the Preferred Share Private Placement, the Preferred Share Offering and the Common Share Offering and BlackRock being satisfied in its sole discretion with the results of its due diligence and the satisfaction of certain other conditions. The Preferred Share Private Placement replaces the proposed transaction with BlackRock described in the Company's press release of February 21, 2013.
The preferred shares to be issued pursuant to the Preferred Share Private Placement (the "BlackRock Preferred Shares") are expected to have substantially similar dividend, liquidation, redemption and voting rights as the Public Preferred Shares referred to below, save and except that any dividends or redemption amounts declared and paid to the holder of BlackRock Preferred Shares by a subsidiary of the Company (the "Relevant Subsidiary") on preferred shares issued by such Relevant Subsidiary to a holder of BlackRock Preferred Shares will reduce the dividend or redemption amount payable to the holders of the BlackRock Preferred Shares, and the BlackRock Preferred Shares (together with preferred shares issued by such Relevant Subsidiary) will be exchangeable on a one-for-one basis into Public Preferred Shares at the option of the holder.
Preferred Share Offering and Common Share Offering
The preferred shares to be issued pursuant to the Preferred Share Offering (the "Public Preferred Shares") are expected to have the terms and conditions set out in the Preliminary Short Form Prospectus and to be priced at US$25 per share, with each Public Preferred Share entitling the holder to cumulative preferential cash dividends, if and when declared by the board of directors of Banro, that will accrue on the last day of each fiscal quarter in an amount that reflects an annual dividend yield (based on the Redemption Price of the Public Preferred Shares) of between 10% and 15% based on the amount of gold production from Banro's existing properties during the immediately preceding fiscal quarter. The "Redemption Price" of each Public Preferred Share as of any date will be the dollar-equivalent value (at such date) of approximately 0.015625 ounces of gold (subject to certain adjustments) plus the amount of all accrued and unpaid dividends on such date.