Celsius Resources Limited, listed on the ASX and AIM under the ticker CLA, said a 40% interest in Makilala Mining Company Inc. (MMCI) was auctioned on Monday after being pledged as collateral under a loan agreement. Equinaire Holdings Limited, a subsidiary of Kiri Industries Limited, submitted a credit bid of $5,010,000 and was declared the winning bidder because no other registered bidders attended.
The auction arises from a dispute over the Omnibus Loan and Security Agreement between MMCI and Equinaire. Equinaire issued multiple notices alleging events of default, including the claim that a Notice of Relinquishment issued by Makilala Holding Limited, a wholly owned Celsius subsidiary, to Sodor Inc. breached the agreement. Representatives of Makilala Holding attended the auction to record that the outcome remains subject to pending arbitration between Makilala Holding and Equinaire.
Celsius disputes that any default occurred and challenges Equinaire's ability to initiate foreclosure and sell Makilala Holding's interest in MMCI, saying the alleged defaults do not satisfy the contractual conditions required before enforcement rights can be exercised. Before Equinaire can register a transfer of MMCI shares with the Philippine Securities and Exchange Commission, it must obtain a Certificate Authorizing Registration from the Bureau of Internal Revenue, a process that typically takes 27 working days, or about six to eight weeks.
Celsius said it will file a Motion for Reconsideration with the Regional Trial Court of Makati and may appeal to the Court of Appeals. It also plans to progress arbitration to seek an injunction over the transfer of MMCI shares and pursue damages against Equinaire.
