Banro Corporation
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(Name of Issuer)
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Common Shares, no par value
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(Title of Class of Securities)
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066800103
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(CUSIP Number)
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Robert Lanava, Chief Compliance Officer
Gramercy Funds Management LLC
20 Dayton Avenue
Greenwich, CT 06830
Tel: +1 (203) 552-1902
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
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January 31, 2017
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(Date of Event Which Requires Filing of this Statement)
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If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.240.13d-1(e), 240.13d‑1(f) or 240.13d-1(g), check the following box [X].
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CUSIP No.
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066800103
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1.
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NAME OF REPORTING PERSONS
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Gramercy Funds Management LLC
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2.
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a)
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[_]
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(b)
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[_]
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3.
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SEC USE ONLY
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4.
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SOURCE OF FUNDS
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AF
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5.
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
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[_]
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6.
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CITIZENSHIP OR PLACE OF ORGANIZATION
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Delaware
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
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7.
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SOLE VOTING POWER
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0
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8.
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SHARED VOTING POWER
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60,337,4831
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9.
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SOLE DISPOSITIVE POWER
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0
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10.
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SHARED DISPOSITIVE POWER
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60,337,4831
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11.
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
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PERSON
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60,337,4831
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12.
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
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CERTAIN SHARES
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[_]
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13.
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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17.0%1
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14.
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TYPE OF REPORTING PERSON
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IA, OO
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CUSIP No.
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066800103
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1.
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NAME OF REPORTING PERSONS
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Robert Koenigsberger
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2.
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a)
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[_]
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(b)
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[_]
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3.
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SEC USE ONLY
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4.
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SOURCE OF FUNDS
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AF
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5.
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
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[_]
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6.
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CITIZENSHIP OR PLACE OF ORGANIZATION
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United States of America
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
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7.
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SOLE VOTING POWER
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0
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8.
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SHARED VOTING POWER
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60,337,4832
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9.
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SOLE DISPOSITIVE POWER
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0
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10.
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SHARED DISPOSITIVE POWER
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60,337,4832
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11.
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
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PERSON
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60,337,4832
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12.
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
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CERTAIN SHARES
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[_]
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13.
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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17.0%2
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14.
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TYPE OF REPORTING PERSON
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IN, HC
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CUSIP No.
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066800103
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Item 1.
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Security and Issuer.
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The name of the issuer is Banro Corporation, a corporation organized in Canada (the "Issuer"). The address of the Issuer's principal executive offices is 1 First Canadian Place, 100 King Street West, Suite 7070, Toronto, Ontario, M5X 1E3, Canada. This Schedule 13D relates to the Issuer's Common Shares, no par value (the "Shares").
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Item 2.
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Identity and Background.
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(a), (f)
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The persons filing this statement are (i) Gramercy Funds Management LLC, a Delaware limited liability company ("Gramercy"), and (ii) Robert Koenigsberger, a citizen of the United States of America ("Mr. Koenigsberger", and together with Gramercy, the "Reporting Persons").
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(b)
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The principal business address for Gramercy and Mr. Koenigsberger is 20 Dayton Avenue, Greenwich, Connecticut, 06830, U.S.A.
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(c)
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Mr. Koenigsberger is a Partner and the Chief Investment Officer of Gramercy, an investment adviser registered with the Securities and Exchange Commission (the "SEC") that serves as investment manager and/or general partner to private investment vehicles and managed accounts.
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(d)
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Neither of the Reporting Persons has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
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(e)
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Neither of the Reporting Persons has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
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Item 3.
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Source and Amount of Funds or Other Consideration.
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The funds for the purchase of the Shares beneficially owned by the Reporting Persons came from working capital of certain investment advisory clients of Gramercy. The net investment costs (including commissions, if any) of the Shares beneficially owned by the Reporting Persons is approximately $25,187,470.07. No borrowed funds were used to purchase the Shares, other than any borrowed funds used for working capital purposes (including certain leverage arrangements) in the ordinary course of business.
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Item 4.
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Purpose of Transaction.
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The Shares beneficially owned by the Reporting Persons were acquired for investment in the ordinary course of the Reporting Persons' investment activities because they believe the Shares represent an attractive investment opportunity.
On January 31, 2017, the Issuer and Gramercy entered into a support agreement (the "Support Agreement") as part of a plan of arrangement by the Issuer under the Canada Business Corporations Act to recapitalize by refinancing a total of US$207.5 million of the Issuer's outstanding debt, equitizing the Issuer's outstanding preferred shares and raising US$45 million by way of a gold forward sale (the "Recapitalization"). The Issuer issued (i) a press release on January 31, 2017 (the "Banro Corp. Press Release") on the SEC's website, and (ii) a material change report on February 10, 2017 (the "Material Change Report") on the Canadian System for Electronic Document Analysis and Retrieval ("SEDAR") that, among other things, summarize the proposed Recapitalization. Further, pursuant to the Recapitalization and compliance with National Instrument 62-103 of the Canadian Securities Administrators, Gramercy issued a press release on February 1, 2017 (the "Gramercy Press Release") to disclose the Shares currently beneficially owned by it and the anticipated amount of Shares it would beneficially own upon implementation of the Recapitalization.
In particular, the Recapitalization contemplates (a) the refinancing of the maturing US$175 million senior secured notes and US$22.5 million loan with new US$197.5 million senior secured notes with a 4-year maturity, (b) the conversion of the outstanding exchangeable preferred shares and gold-linked preferred shares of the Issuer and certain of its subsidiaries into Shares, (c) the execution of a gold forward sale agreement with Gramercy and certain other shareholders of the Issuer to raise US$45 million (the "New Gold Forward") to be used by the Issuer for working capital and general corporate purposes, including to fund transaction costs and repay an interim loan facility, and (d) the extension of the maturity dates on an existing US$10 million loan from July 15, 2018 and September 1, 2018 to March 1, 2020.
In addition, on February 7, 2017, Gramercy entered into a new term loan with a subsidiary of the Issuer (the "Interim Term Loan") with a principal amount of US$6.5 million, an interest rate of 15% per annum and a maturity date of April 14, 2017. The Interim Term Loan will be exchanged for part of Gramercy's interest in the New Gold Forward on the closing of the Recapitalization, at which time interest will be payable in cash.
Subject to the terms and conditions of the Support Agreement, Gramercy has agreed to support and vote in favor of the Recapitalization, and pursuant to the terms of the Support Agreement, Gramercy will be entitled to (i) a fee equal to 0.25% on all securities beneficially owned by it and loan facilities to which it is a party that are affected by the implementation of the Recapitalization, and (ii) a funding fee equal to 0.50% of the amount advanced by it under the New Gold Forward. Upon the implementation of the Recapitalization, Gramercy will also (i) be entitled to appoint an individual to serve on the Issuer's board of directors (the "Board of Directors"), and (ii) have a consent right in respect of four independent directors serving on the Board of Directors.
The Recapitalization is expected to be implemented by the Issuer in April 2017, subject to the Issuer obtaining all required noteholder, shareholder, regulatory and court approvals. The outside date under the Support Agreement for completing the Recapitalization is April 14, 2017. Following the implementation of the Recapitalization, Gramercy will beneficially own approximately 30% of the Issuer's outstanding Shares.
The foregoing was a summary of the Gramercy Press Release, the Banro Corp. Press Release and certain material terms of the Support Agreement. The foregoing descriptions are not, and do not purport to be, complete and are qualified in their entirety by reference to the full text of the Gramercy Press Release, the Banro Corp. Press Release, the form of the Support Agreement and the Material Change Report, which have been filed as Exhibits B, C, D and E hereto, respectively, and are incorporated herein by reference.
Except as otherwise set forth herein, the Reporting Persons do not have any present plans or proposals which would relate to, or result in, the matters set forth in subparagraphs (a) – (j) of Item 4 of Schedule 13D. However, subject to the terms of the Support Agreement, market conditions and in compliance with applicable securities laws, the Reporting Persons reserve the right, at a later date, to effect one or more of such changes or transactions in the number of Shares they may be deemed to beneficially own in open-market transactions or privately negotiated transactions. The Reporting Persons may also communicate with the Issuer's management, board of directors and other holders of Shares from time to time.
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Item 5.
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Interest in Securities of the Issuer.
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(a) - (d)
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As of the date hereof, Gramercy may be deemed to be the beneficial owner of 60,337,483 Shares (including warrants and exchangeable preferred shares of the Issuer), constituting 17.0% of the Shares, based upon 355,525,569 Shares outstanding as of the date hereof as adjusted for warrants and exchangeable preferred shares of the Issuer beneficially owned by Gramercy. Gramercy has the sole power to vote or direct the vote of 0 Shares and the shared power to vote or direct the vote of 60,337,483 Shares. Gramercy has the sole power to dispose or direct the disposition of 0 Shares and the shared power to dispose or direct the disposition of 60,337,483 Shares.
By virtue of Mr. Koenigsberger's position as a Partner and the Chief Investment Officer of Gramercy, as of the date hereof, Mr. Koenigsberger may be deemed to be the beneficial owner of 60,337,483 Shares (including warrants and exchangeable preferred shares of the Issuer), constituting 17.0% of the Shares, based upon 355,525,569 Shares outstanding as of the date hereof as adjusted for warrants and exchangeable preferred shares of the Issuer beneficially owned by Mr. Koenigsberger. Mr. Koenigsberger has the sole power to vote or direct the vote of 0 Shares and the shared power to vote or direct the vote of 60,337,483 Shares. Mr. Koenigsberger has the sole power to dispose or direct the disposition of 0 Shares and the shared power to dispose or direct the disposition of 60,337,483 Shares.
There have been no transactions in the Shares by the Reporting Persons during the past sixty days.
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(e)
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N/A
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Item 6.
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Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.
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The information set forth in Item 4 above is incorporated by reference in its entirety in this Item 6. Except for the Support Agreement described in Item 4 above and attached hereto as Exhibit D, the Reporting Persons do not have any contract, arrangement, understanding or relationship with any person with respect to securities of the Issuer.
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Item 7.
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Material to be Filed as Exhibits.
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Exhibit A:
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Joint Filing Agreement
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Exhibit B:
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Gramercy Press Release
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Exhibit C:
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Banro Corp. Press Release (incorporated by reference to Exhibit 99.1 to the Form 6-K filed with the SEC by the Issuer on January 31, 2017)
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Exhibit D:
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Form of Support Agreement (incorporated by reference to the Form of Support Agreement filed by the Issuer in Canada on SEDAR on February 10, 2017)
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Exhibit E:
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Material Change Report (incorporated by reference to the Material Change Report filed by the Issuer in Canada on SEDAR on February 10, 2017)
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February 10, 2017
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(Date)
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Gramercy Funds Management LLC*
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By: /s/ Robert Koenigsberger
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Name: Robert Koenigsberger
Title: Partner & Chief Investment Officer
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Robert Koenigsberger*
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/s/ Robert Koenigsberger
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February 10, 2017
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(Date)
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Gramercy Funds Management LLC*
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By: /s/ Robert Koenigsberger
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Name: Robert Koenigsberger
Title: Partner & Chief Investment Officer
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Robert Koenigsberger*
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/s/ Robert Koenigsberger
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