REG - Bushveld Minerals Ld - Agreement on Convertible Loan Note Refinancing

Bushveld MineralsAnnouncement

27/11/2023 07:00

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RNS Number : 6740U  Bushveld Minerals Limited  27 November 2023

Market Abuse Regulation ("MAR") Disclosure

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the Company's obligations under Article 17 of
MAR.

Bushveld Minerals Limited

("Bushveld" or the "Company")

 

Agreement on Convertible Loan Note Refinancing

 

27 November 2023

 

Bushveld Minerals Limited (AIM: BMN), the integrated primary vanadium
producer, is pleased to announce that it has entered into a conditional
agreement to refinance its existing convertible loan notes with Orion Mine
Finance ("Orion"), following the Term Sheet agreed in May this year.

 

Highlights:

 

§ Today's conditional agreement extends the maturity date for Bushveld's
existing convertible loan notes to 31 January 2024 (from 21 December 2023) and
refinances the convertible debt obligations of c.US$46.9 million (including
accrued interest) as follows:

·      Conversion of 10% of the outstanding balance (including interest)
of the convertible debt obligations ("CLN Balance"), expected to be c.US$4.7
million, as at the effective date 1  (#_ftn1) into shares at 3.00p per share.

·      A new convertible loan note of c.US$14.1 million representing 30%
of the CLN Balance maturing in June 2028.

·      A term loan of c.US$28.1 million representing 60% of the CLN
Balance.

·      Supplemental royalty at not more than 0.264% of Bushveld's gross
revenues and reducing by 80% at the term loan maturity.

 

§ New structure better aligns repayment with expected internal cash
generation projections.

 

§ The refinancing is conditional upon (inter alia):

·      Entry into the finance and security documents, which are
progressing accordingly.

·      Bushveld shareholder approval.

·      Raising of at least US$12.0 million via the issue of new ordinary
shares in the Company to  third party and existing investors (which would be
satisfied by the proposed equity investment by Southern Point Resources - Fund
1 SA L.P., represented by its general partner SPR GP1 Proprietary Limited).

·      Consent by the Financial Surveillance Department of the South
African Reserve Bank.

·      Completion of the Share Exchange transaction between the Company
and the minority shareholders in Bushveld Vametco Holdings Pty Ltd, by which
the Company will become the 100% shareholder in Bushveld Vametco Holdings Pty
Ltd, as announced on 30 October 2023.

 

§ All outstanding conditions are expected to be satisfied in due course, and
the transaction is expected to complete before the 31 January 2024 deadline
agreed by all parties.

 

 

 

Craig Coltman, CEO of Bushveld Minerals commented:

"I am pleased to announce today's agreement with Orion, which has supported
the Company since it's initial investment three years ago. Since first
announcing the terms of the proposed restructuring earlier this year, there
has been an imperative to enter into a binding agreement with Orion, and
whilst the refinancing remains conditional upon certain items, including
Bushveld shareholders' approval, it provides certainty as we move forward with
the other elements of our financial package.

The restructuring is a key part of our strategy to restore value in the
Company, along with ensuring Bushveld delivers its operational targets,
simplifies its corporate structure and refines its investment proposition."

 

 

Key Terms of the Proposed Refinancing

§ 10% of the CLN Balance (c. US$4.7 million) to be capitalised into a
subscription for shares in Bushveld at 3.00p per share, a 48% premium to the
20-day weighted average share price (as at 24 November 2023).

 

§ 30% of the CLN Balance (c.US$14.1 million) to remain as a convertible loan
note with the following revised terms ("New CLN"):

·      Interest: 12%

·      Conversion price: 3.99p

·      Maturity Date: 30 June 2028

·      Bushveld shall have a one-time right to redeem 50% (in whole and
not in part) of the New CLN in June 2026, subject to the right of Orion to
elect for conversion of the same for a 30-day period.

 

§ 60% of the CLN Balance (c.US$28.1 million) will be converted into a secured
term loan ("Term Loan") on the following terms:

·      Interest: 6.0% ("Margin") plus the greater of (i) 3-month Secured
Overnight Financing Rate ("SOFR") and (ii) 3.0% per annum.

·      Interest payable quarterly in arrears in cash starting from the
last business day of the quarter in which the closing of the transaction
occurs and on the last business day of each quarter thereafter. In the event
that the Company has insufficient cash available to pay interest on its due
date, the interest due on that date shall continue to accrue.  In the event
of default, the Margin will be increased by 3%.

O  Principal repayments structured to

a.   25% of the facility amount (c. US$7.0 million) to be repaid  by 30
June 2024

b.   30% of the facility amount (c. US$8.4 million) to be repaid by 30 June
2025

c.   45% of the facility amount (c. US$12.6 million) to be repaid by 30 June
2026

 

·      The facility may be prepaid in whole or in part at any time.
Prepayment is subject to the following early redemption fee schedule based on
the outstanding balance at the time of prepayment.

o  Prior to 30 June 2024: 4%

o  After 30 June 2024 until 30 June 2025: 3%

o  After 30 June 2025 until 30 June 2026: 2%

 

§      Supplemental royalty, on the same terms as the existing
Production Financing Agreement during the tenure of the Term Loan, except for
the following:

·    Royalty repayment rate of 0.264% with a realised price per kgV of
less than US$47/kgV.

·    Royalty repayment rate of 0.216% with a realised price per kgV of
greater than US$47/kgV.

·      The later of 30 June 2027 and when the Term Loan has been fully
repaid, the repayment rate will reduce by 80% and shall be payable for the
life of the Vametco operation.

 

 

 

ENDS

 

Enquiries: info@bushveldminerals.com

 Bushveld Minerals Limited                                                          +27 (0) 11 268 6555
 Craig Coltman, Chief Executive Officer
 Chika Edeh, Head of Investor Relations

 SP Angel Corporate Finance LLP                     Nominated Adviser & Broker      +44 (0) 20 3470 0470
 Richard Morrison / Charlie Bouverat
 Grant Baker / Richard Parlons

 RBC Capital Markets                                Joint Broker                    +44 (0) 20 7653 4000
 Jamil Miah / Sahil Suleman

 Tavistock                                          Financial PR
 Gareth Tredway / Tara Vivian-Neal/ James Whitaker                                  +44 (0) 207 920 3150

 

 

ABOUT BUSHVELD MINERALS LIMITED

Bushveld Minerals is a vertically integrated primary vanadium producer, it is
one of only three operating primary vanadium producers. In 2022, the Company
produced more than 3,800 mtV, representing approximately three per cent of the
global vanadium market. With a diversified vanadium product portfolio serving
the needs of the steel, energy and chemical sectors.

Detailed information on the Company and progress to date can be accessed on
the website www.bushveldminerals.com (http://www.bushveldminerals.com)

 

 

 

 1  The date on which all conditions referred to below are satisfied.

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