MSY Group of Companies executed a binding conditional term sheet to acquire Lanka Graphite Limited (ASX:LGR) in a reverse merger transaction on August 3, 2018. As consideration, Lanka Graphite Limited will issue 350 million shares at issue price of AUD 0.05 per share. MSY Group of Companies signed an agreement to acquire Lanka Graphite Limited (ASX:LGR) in a reverse merger transaction on July 5, 2019. MSY Group of Companies will advance a loan of AUD 1 million to Lanka Graphite Limited to be used for the purposes of working capital, relisting transaction costs and the costs associated with Lanka Graphite Limited undertaking a spin-off of its existing mining exploration assets. The loan will be provided over the next six weeks and will convert into ordinary shares in Lanka Graphite Limited at an issue price of AUD 0.05 per share upon completion of the acquisition, forming part of the total consideration shares. If the transaction does not proceed, the loan shall be refundable to MSY Group of Companies. As part of transaction, Lanka Graphite Limited will seek to convert approximately AUD1.35 million in current convertible note debt and approximately AUD 0.7 million in funds payable to the vendors of Miniran Pty Ltd into ordinary shares of Lanka Graphite Limited. Lanka Graphite Limited will spin out or divest its existing Sri Lankan graphite assets as soon as practicable following completion of the transaction. Upon completion, MSY Group of Companies will hold 62.65% stake in Lanka Graphite Limited. In connection with the transaction, Lanka Graphite Limited will be seeking to conduct a capital raising to raise up to AUD 3 million via the issue of up to 60 million shares at an issue price of AUD 0.05 per share. The transaction is subject to a number of conditions precedent, including completion of due diligence (45 day due diligence period), drafting and execution of definitive documents, shareholder approvals of Lanka Graphite Limited, any applicable required regulatory approvals, re-compliance with Chapters 1 and 2 of the ASX Listing Rules and the advance of the loan funding by MSY Group of Companies to Lanka Graphite Limited.