Newfield Resources Ltd (ASX:NWF) has raised a combined A$16.98 million in equity through a two-pronged strategy that includes the conversion of a A$13.86 million loan and a share placement worth around A$3.11 million (US$2 million).
Strategic financial move
The manoeuvre follows a loan agreement with Wonder Holdings Pty Ltd under which A$13.86 million has been converted into 92,424,094 fully paid ordinary shares.
This conversion is expected to result in quarterly interest payment savings of roughly A$254,000 for Newfield.
The conversion rate is set at A$0.15 per share, marking an 11.3% discount to the 15-day volume-weighted average price (VWAP) of A$0.1691.
Concurrently, Newfield will issue 20,752,273 shares at A$0.15 per share to Rustiyan Oen, its largest shareholder, under a separate placement deal. Settlement is expected around September 22.
Funds to bolster working capital
On completion, Wonder Holdings' stake will grow to about 10.48%, while Oen's shareholding will reduce from 24.68% to 23.86%.
Neither Wonder Holdings nor Rustiyan Oen are related parties to Newfield Resources.
The funds raised will bolster Newfield's working capital, positioning the company for further growth and operational agility.
Executive director Kaarl Smithson said: “We are incredibly appreciative of Wonder Holdings’ long-term support for Newfield by agreeing to convert the outstanding balance of the loan and interest to equity.
“We are also very grateful to have the continuing support of Mr Oen through the placement.
“The board continues to develop a broader funding strategy required to support the ongoing development of the Tongo Diamond Mine.
“This strengthening of the balance sheet through reducing debt will positively contribute to this strategy.”