Power to appoint receiver over Ultra
Lithium debt
Power Minerals Limited (ASX: PNN, Power or the Company) advises
that it is commencing the process to appoint a receiver to Ultra Lithium
Inc. (TSXV: ULT) (Ultra Lithium) to recover the full amounts outstanding
under a convertible loan agreement (CLA) between the two companies
(original CLA ASX announcement 16 May 2023).
Power has appointed Hall Chadwick in Western Australia as a key advisor
to manage the debt recovery process. Hall Chadwick will assist with
engaging Canadian-based insolvency firms to appoint a receiver to Ultra
Lithium and recover the debt. When appointed, the receiver may
exercise Power’s CLA rights to either enforce the securities interests by
sale of Ultra Lithium’s assets or convert the debt into Ultra Lithium
shares.
Power remains open to a settlement of the amounts outstanding under
the CLA prior to the receivership process commencing. Power also
remains committed to ensuring that its rights under the CLA and the
associated securities interests are maintained and enforced.
Background
Power Minerals and Ultra Lithium entered into a binding term sheet on
11 May 2023 (BTS) which contemplated the entry into the CLA. Power
attempted to complete the BTS transaction, however as per PNN ASX
announcement dated 19 July 2023, Power confirmed that it had
identified key matters of concern, which, in conjunction with Ultra
Lithium’s lack of substantive engagement in respect of the BTS
transaction, had caused serious concerns as to whether the BTS
transaction would complete.
Under the CLA, Power advanced an interest-bearing loan of AUD $1.13
million to Ultra Lithium on 12 May 2023. The loan, together with accrued
interest, was repayable on demand by Power by the issue of shares in
Ultra Lithium Inc. or in cash at any time after 30 June 2024. On 25
October 2023, Power received a part payment of AUD $150,000 under
the CLA.
The balance of the loan amount plus accruing interest has continued to
remain unpaid. As such, Power recently initiated steps to secure the full
repayment of the amounts outstanding under the CLA.
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