Iofina plc (LON:IOF) has announced a new debt restructuring deal which also sees it secure an additional US$10mln of funding.
The water processing group has a signed heads of terms for amendments to its existing convertible debts of US$20mln - of which US$15mln was owed to Stena Investment and US$5mln is owed to Panacea Limited – with a new maturity date set as Jun2 2019.
Interest rates are to be lowered to 5% from 6%, and the new terms allow accrued interest to be rolled-up into loan principal so it can be paid at maturity.
If the loans were converted in their entirety now the U$20mln debt would (at current foreign exchange) equate to around 45% of the group’s existing share capital.
Stena, already a 7.8% shareholder in the company, has agreed to extend a further US$10mln line of credit which is designed to give Iofina flexibility for its operations and expansion plans. The new facility carries interest at 6%.
Dr Thomas Becker, Iofina chief executive, highlighted that the new arrangements will allow the company to reduce immediate cash payments.
“The additional US$10mln line of credit with Stena gives Iofina added flexibility to execute business objectives timely.
“We expect to finalize the details within the next month.
“Iofina is appreciative of the ongoing support from Stena and Panacea; partnerships which are highly respected and valued"
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Iofina has developed waste water processing technologies which initially targeted onshore oil and gas operators in the United States, and naturally the business has been impacted by the slowdown in drilling activities over the past year amid lower oil prices.
The business takes waste from drilling operations which is processed into iodine.
Nevertheless, last month the company revealed results for 2015 which were slightly better than expected. The figures for the 12 months to December 31 revealed the company made an operating profit (EBITDA) of US$492,000 on revenue of US$20.3mln, while the pre-tax loss narrowed US$3.31mln.
It confirmed it was on track to produce 250-270 metric tonnes of crystalline iodine in the first half of 2016.
Becker, at that time, highlighted that the company was looking at “prudent expansion” plans for 2016 as the iodine prices had begun to stabilise.