The West Australian reported that shares in Territory Resources surged after its major shareholder, Noble Group, agreed to a significantly higher price for its USD 20.7 million debt to equity swap announced in February and the iron ore miner flagged takeover interest from an undisclosed third party. The debt will now be converted into shares in Territory at 45 cents, rather than the previously agreed price of 31.5 cents.

Under the terms of the new deal, Territory has also agreed to grant a six-month option to the Hong Kon based commodities trader to subscribe for a share placement of 35.1 million shares, also at 45 cents.

If enacted, Territory will receive a cash injection of USD 15.8 million and Noble will boost its stake in the iron ore miner to 45%

Territory has also agreed to an anti-dilution right giving Noble the right to take part in any other capital raising within the six month period to maintain its aggregate shareholding.

Territory said the completion of the debt conversion would leave it with a stronger balance sheet and the immediate release of cash flow to service debt.

Territory nearly collapsed during the global financial crisis after a series of inters company loans saddled it with a big pile of debt.

(Sourced from www.thewest.com.au)