Aeris Resources Ltd (ASX:AIS) has completed a debt and equity restructuring that will see it significantly reduce its debt and simplify its capital structure.
Significantly, the restructuring transaction will see Senior debt reduced by 53% down to US$30 million from US$63.3 million.
Furthermore, the share capital has been reduced by 50% and a previous agreement has been cancelled that ensures Aeris gains full exposure to copper price increases over A$8,000 per tonne.
The restructure is a significant and value‐accretive event for shareholders
Andre Labuschagne, executive chairman, said: “This is the best position the company has been in for the last five years.
“With debt reduced, potential shareholder dilution reversed, and the capital structure simplified, the company is now positioned to attract renewed interest from quality investors and trade on a normalised basis, reflective of the fundamental value and growth prospects of the company.”
Aeris is a mid-tier copper producer with growth prospects
Aeris is an established copper producer and developer with multiple mines and a 1.8 million tonnes per annum copper processing plant at its Tritton Copper Operations in New South Wales.
In FY2017, the Tritton Copper Operations produced 23,404 tonnes of copper and in FY2018 is targeting production of 27,000 tonnes of copper.
Aeris also has a portfolio of prospective exploration projects creating a pipeline for future growth, including advanced projects at its Tritton Copper Operations.
Restructure transaction: Senior debt reduced by 53%
The senior debt has been reduced from US$63.3 million (including accrued interest) to US$30 million (including a US$5 million arranger fee).
The new senior debt facility has a term of 2 years and an interest rate of 12.5% per annum.
Restructure transaction: Share capital reduced by 50%
Associated with the restructure is an agreement by SCB to cancel 467 million of its 560 million convertible redeemable preference shares, reducing the number on issue to 93 million.
Following the cancellation of these preference shares, the total number of shares on issue, on a fully diluted basis, reduces by 50% from 934 million to 467 million shares.
Restructure transaction: Full exposure to higher copper prices
Furthermore, the copper price agreement which was part of the 2015 debt restructure, will be cancelled for $1, which now provides Aeris with 100% exposure to increases in the copper price above A$8,000 per tonne.
As part of the restructure Aeris proposes to enter into a copper hedging program for 1,000 tonnes of copper per month over 12 months.