Royal Helium Ltd (TSX-V:RHC, OTCQB:RHCCF) announced plans to raise up to C$4.5 million through a non-brokered private placement of convertible debenture units.
The offering will involve up to 13,520 debenture units priced at C$1,000 each, the company said.
The financing includes the issuance of up to 4,500 new units for cash proceeds of C$4.5 million, while the remaining 9,020 units are intended for existing debenture holders who opt to exchange their current securities.
Each debenture unit consists of 1,000 unsecured convertible debentures, convertible into common shares at C$0.05 per share, and 20,000 common share purchase warrants exercisable at the same price. The debentures carry an annual interest rate of 20%, maturing three years from the expected closing date of December 11, 2024.
The offering's success hinges on the participation of at least 50% of existing debenture holders, who must consent to exchange their current debentures for the new units. A vote requiring 66.67% approval from holders of Royal Helium's 12% and 14% convertible debentures will determine the outcome.
Proceeds from the offering will be used for the re-commissioning of Royal Helium’s Steveville production facilities, as well as for general corporate and working capital purposes.