("Sunkar" or the "Company")
Sunkar (AIM: SKR) announces that it has raised $0.1 million through a new loan facility ("SAPC Loan") provided by Sun Avenue Partners Corporation ("SAPC"), which was entered into on 26 May 2014.
Since the last Company update, as set out in the announcement on 2 April 2014, the Company's financial position has worsened significantly. 
The funds raised by the convertible loan note, issued on 7 April 2014, were anticipated by the board of Sunkar (the "Board") to provide sufficient working capital until additional earth moving contracts could be agreed and monies from the second earth moving contract were received. 
However, cash receipts due under the second earth moving contract have been delayed and a third earth moving contract has still not been concluded. 
Accordingly, the Company's working capital position is materially below its previous forecast and, as a result, the Company required an immediate working capital injection in order to make the payments due under its credit line facility with Asia Credit Bank (Kazakhstan) ("ACB Loan"). The Board is grateful to SAPC for its continued support.
The Board believes that it is likely that further financial support will be required from SAPC, particularly in order to make further payments under the ACB Loan, should the position with the second and third earth moving contracts not be resolved in the very short term.
Accordingly, the Company will provide an update on the Board's further funding discussions with SAPC, with regard to securing such funding, in the next few weeks.
The funds provided by the SAPC Loan will be used for general working capital requirements and to make payments due under the ACB Loan. 
Terms of the SAPC Loan
The SAPC Loan is for a principal sum of $0.1million and is unsecured.  Repayment is due, in full, not later than 31 December 2014, together with accrued interest, payable at 10 per cent. per annum. The Company has the option to prepay the SAPC Loan in one or more instalments.  
The SAPC Loan is subject to standard events of default, including insolvency and change of control, at which time the facility, plus any accrued interest would be immediately due and payable to SAPC. The SAPC Loan is subject to English law and the jurisdiction of the English courts.
Related Party Transaction
SAPC is a substantial shareholder and accordingly the SAPC Loan is a related party transaction under the AIM Rules.  With regard to the Company's requirement for further funding, the Directors have considered alternative sources of funding, including bank debt and the issue of equity, and have concluded that such alternatives would not be available to the Company, within the required timeframe, on terms more beneficial than those offered by SAPC.
The Directors consider, having consulted with the Company's nominated adviser, Strand Hanson, that the terms of the SAPC Loan are fair and reasonable insofar as the Company's shareholders are concerned.
For further information, please contact:
Sunkar Resources plc
Teck Soon Kong, Chairman                               Tel: +44 20 7397 3730
Serikjan Utegen, CEO   
Strand Hanson Limited
Stuart Faulkner                                                   Tel: +44 20 7409 3494
Andrew Emmott
James Dance
Bankside Consultants
Simon Rothschild                                                Tel: +44 7703 167065   

all news