Bushveld Minerals Limited (AIM:BMN, OTC:BSHVF) shares rose on Friday morning after the firm revealed it has signed a non-binding term sheet to refinance its existing convertible loan note of approximately US$45mln due in November 2023.
The proposed agreement with Orion Mine Finance includes a new three-year term loan worth around US$27mln, repayable in escalating capital amounts, a new convertible loan note of approximately US$13.5 million maturing in June 2028, and conversion of approximately US$4.5mln of existing convertible loan note into shares at 6p per share.
The deal also includes a supplemental production financing agreement (PFA) at not more than 0.22% of gross revenues, reducing by 80% at loan maturity.
In 2020, Bushveld Minerals agreed on a US$65mln financing transaction with Orion, which included a US$35mln convertible loan note (CLN) maturing in November 2023, as well as a US$30mln PFA.
The CLN was primarily intended to finance expansion plans at Vametco. However, following further studies, it was amended to also fund the refurbishment and expansion of Vanchem, including the commissioning of Kiln 3.
In a statement, Fortune Mojapelo, CEO of Bushveld Minerals, commented: "The revised structure aligns the repayment schedule with our expected internal cash generation projections, which should provide the company with adequate flexibility to continue with its growth objectives.
"We look forward to finalising the refinancing and further strengthening our long-standing partnership with Orion," he added.
The transaction is conditional on due diligence, shareholder approval at a general meeting and definitive documentation.
Around 9.20am in London, Bushveld shares were 16.6% higher at 4.23p.