The refinancing of Vast Resources PLC (AIM:VAST) outstanding bonds is a major catalyst for the company, house broker Shore Capital said in a note.
Vast today announced it had repaid in full the outstanding bonds owed to Atlas Special Opportunities LLC following a subscription and placing which means Atlas no longer has any conversion or any right to call for the issue of Vast ordinary shares, removing share dilution concerns.
Chief executive Andrew Prelea described it as a definitive turning point and said he believes it should restore fair value to the share price.
“Refinancing of the outstanding bonds with Atlas is a major catalyst for the company, in our view,” Shore Capital analyst Sheldon Modeland said in a note. “With the convertible loan now fully repaid the company can focus on its optimisation plans for Baita Plai.
“We are encouraged by the ongoing mining and development work over the past few months as well as the potential for additional revenue with commissioning of a second mill circuit and a new molybdenum line.
“We look forward to further updates as the mine continues with its ramp up production.”
In Vast’s statement, the company also noted that it had also undertaken to pay back US$1.0mln of debt owed to Mercuria Energy Trading SA and plans to repay the entire debt owed to Mercuria on or before May 15, 2023.
Vast has secured a US$4.0mln asset-backed debt facility from A&T Investments SARL, arranged by Swiss investment bank Alpha Credit SA, and raised a total £3.24mln before costs through a conditional subscription and placing of about 463mln new shares at 0.7 pence each.
The funds raised from the subscription and placing will be used to settle the balance of debt to Atlas over US$4.0mln and the agreed debt reduction commitment to Mercuria as well as to support the continued optimisation of Vast’s Baita Plai polymetallic mine in Romania.
In London, Vast shares were trading at 1.2p, up around 45%, and had earlier today traded as high as 1.6p.