According to a report by the London Evening Standard, a strategic loan was the cause of the shares of mining company Strategic Natural Resources jumping over 75% on the Alternative Investment Market. The sub-market-listed company accepted a loan on behalf of Acting Chief Executive Officer Gabriel Ruhan from his own brother, property and technology entrepreneur Andrew Ruhan. Andrew is the founder of computer services company Global Switch and a major investor in the property market.
Andrew handed out the interest-free loan to aid his brother to pay off creditors of SNR subsidiary Elitheni. Elitheni, which is 74% owned by SNR, runs coal assets located in South Africa. The company last month receved a liquidation notice from a consortium of creditors. The GBP875,000 loan will be used by Elitheni to pay off its partner Rapidtrade, aside from other creditors.
Gabrile Ruhan said of the loan, "Despite the aggressive actions of some parties in South Africa in trying to... destroy SNR's shareholders' value, we are confident in our position regarding the liquidation notice. The refinancing of the group's short-term debt will allow... the board to progress their discussions with strategic investors."
The loan from Andrew Ruhan, who also runs Bridgehouse Capital, a private equity firm, and is a board director of Lotus Formula One, helped pushed shares of SNR up from 3.125 pence to 7.25 pence.
Since its establishment in 2004, SNR had been developing, acquiring and managing natural resource deposits in locations in the South African region, particularly in the Eastern Cape Coalfield. Elitheni is SNR's first project, which is located in Port Elizabeth, the company said on its website. SNR intends to be a major coal producer and exporter in the region. It was admitted on AIM in 2007 on the basis of a coal resource under Elitheni which is approximately 15 million tonnes.
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