Bens Creek Group PLC (AIM:BEN, OTC:BENCF) has signed an additional working capital facility (WCF) and amended a previous loan note agreement with its largest shareholder Avani Resources to provide funds while its operations ramp up again.
Adam Wilson, the coal miner's chief executive, said: "The additional working capital facility and the restructured loan note, the offtake agreement announced last week and Chris Walker starting as the CEO of Bens Creek Operations are all positives.
“Combined with the operational issues that we hope have largely been resolved this should put Bens Creek in a good position to meet its goal of being a leading supplier of HvB into both the Domestic and International markets."
As part of the funding, Avani will provide Bens Creek Operations, a 100% owned subsidiary of the company, with a new working capital facility of US$7.5 million plus an additional $2.5 million at its discretion.
To date, Avani has advanced a total of US$5 million under the WCF, which is available until 1 July 2025 but may be terminated earlier if BCO fails to make any coal sales in two consecutive calendar months.
The WCF has an interest rate of 13% per annum which shall not compound rising to 16% If BCO fails to achieve any coal sales in any two consecutive calendar months.
Repayment of the WCF will be in tranches based on a royalty from coal sales made by Bens Creek Operations during the term of the WCF.
In the event of default, the lender may elect, in its sole discretion, to convert all or part of the amount due under the loan note or WCF into shares in Bens Creek Operations.
In addition, the outstanding loan note and accrued interest of US$6.5 million put in place in July 2023 has been restructured into a rolling note that will remain open until the earlier of either repayment of the amounts outstanding or a default.