Tirupati Graphite PLC (LSE:TGR, OTCQX:TGRHF) raised £1.5mln by a private placement of convertible loan notes through Optiva Securities as a first tranche of a £3mln raise.
The proceeds from this initial tranche will be used to fund the upfront cash payment obligation to Battery Minerals Ltd for the acquisition of Suni Resources SA, the Mozambique subsidiary of BAT which holds the Montepuez and Balama Central projects in Mozambique.
In addition, funds will be used to help progress Tirupati’s ongoing construction at the 18,000 tonnes per year flake graphite facility at Sahamamy in Madagascar.
The loan notes have a three-year maturity and a 12% coupon, payable semi-annually, with interest accruing on a daily basis.
Semi-annual interest payments will represent 6% of the par value of the Loan Notes outstanding. At maturity, all outstanding loan notes, if not converted, shall be redeemed at their par value, plus any and all accrued interest.
The loan notes will be direct, subordinated, unsecured obligations, and will not be secured by any mortgage, pledge, or other charge, and will rank equally with one another and with all other existing and future unsecured indebtedness of the company.
Each loan note shall have the right to convert into ordinary shares of the company at 60p, up to the first anniversary of the date of the loan note instrument, 75p from and including the first anniversary of the date of the loan note instrument up to the second anniversary, and 90p from and including the second anniversary.
The Company entered into an agreement to acquire Suni Resources S.A. in August 2021. Suni holds the Montepuez and Balama flake graphite projects. The consideration agreed for the acquisition was A$12.5mln, of which A$1.5mln is to be paid in cash on completion with the balance to be settled in staged share payments.
“It is our stated target to be a company producing circa 8% of the global flake graphite market,” said Shishir Poddar, executive chairman of Tirupati Graphite.
“The flake graphite markets remains on course to grow to above five million tons of annual demand by the turn of the decade - thus, securing sufficient resources to build out to 400,000 tons over the coming years has been a key objective of the company and will be achieved with the acquisition of the Mozambique assets. At Madagascar we remain on track to build up to 84,000 tons annual capacity over the next couple of years and we are currently on the cusp of reaching 30,000 tons annual capacity installed.”