TIDMBMN
RNS Number : 5664Y
Bushveld Minerals Limited
05 May 2023
Market Abuse Regulation ("MAR") Disclosure
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
Bushveld Minerals Limited
("Bushveld" or the "Company")
Proposed convertible loan note refinancing
5 May 2023
Bushveld Minerals Limited (AIM: BMN), the integrated primary
vanadium producer and energy storage solutions provider, is pleased
to announce that it has entered into a non-binding, investment
committee approved, term sheet, with Orion Mine Finance ("Orion")
to refinance its existing convertible loan note.
Highlights:
-- The proposed agreement envisages that the convertible debt
obligations of c.US$45 million due in November 2023 (including
accrued interest) will be refinanced into the following
components:
o A three-year term loan totalling c. US$27 million, repayable
in escalating capital amounts.
o A new convertible loan note of c. US$13.5 million, maturing in
June 2028.
o Conversion of c. US$4.5 million of existing convertible loan
note into shares at 6p per share.
o Supplemental production financing agreement ("PFA") at not
more than 0.22% of gross revenues - reducing by 80% at loan
maturity.
-- New structure has sculpted repayment schedule to align with
expected internal cash generation projections.
-- Transaction is conditional on several items, including due
diligence, shareholder approval at a general meeting and definitive
documentation.
Background
In 2020, Bushveld Minerals agreed a US$65 million financing
transaction with Orion, which included a US$35 million convertible
loan note ("CLN") maturing in November 2023, as well as a US$30
million PFA. The CLN was primarily intended to finance expansion
plans at Vametco however, this was subsequently amended, following
further studies, to also fund the refurbishment and expansion of
Vanchem including the commissioning of Kiln 3 .
The total amount outstanding of the CLN facility (including
accrued interest) is expected to be approximately US$45 million by
the end of Q2 2023 ("CLN Balance").
Key Terms of the Proposed Refinancing
Bushveld and Orion have signed a non-binding, investments
committee approved term sheet as outlined below:
-- 60% of the CLN Balance (c.US$27 million) will be converted
into a 3-year secured term loan ("Term Loan") on the following
terms:
o Interest: 6.0% ("Margin") plus the greater of (i) 3-month
SOFR(1) and (ii) 3.0% per annum.
o Interest payable quarterly in arrears in cash starting from
the last business day of the quarter in which the closing of the
transaction occurs and on the last business day of each quarter
thereafter. In the event that the Company has insufficient cash
available to pay interest on its due date, the interest due on that
date shall continue to accrue. In the event of default, the Margin
will be increased by 3%.
o Principal repayments structured to
a. 25% of the facility amount to be repaid in June 2024,
b. 30% of the facility amount to be repaid June 2025 and
c. 45% of the facility amount to be repaid in June 2026.
II. The facility may be prepaid in whole or in part at any time.
Prepayment is subject to the following fee early redemption
schedule based on the outstanding balance at the time of
prepayment.
o Prior to 30 June 2024: 4%
o After 30 June 2024 until 30 June 2025: 3%
o After 30 June 2025 until 30 June 2026: 2%
-- 30% of the CLN Balance (c.US$13.5 million) to remain as a
convertible loan note with the following revised terms ("New
CLN"):
o Interest: 12%
o Exercise price: 8p
o Maturity Date: 30 June 2028
o Bushveld shall have a one-time right to redeem 50% (in whole
and not in part) of the New CLN in June 2026, subject to the right
of Orion to elect for conversion of the same for a 30-day
period
o Bushveld has the right to force conversion of the New CLN if
the 60 Day VWAP of the Company's share price is in excess of
16p.
-- 10% of the CLN Balance (c. US$4.5 million) to be capitalised
into a subscription for shares in Bushveld at 6p per share(2) , a
46% premium to the 30-day weighted average share price (as at 4 May
2023).
-- Gross revenue PFA top-up, on the same terms as the existing
PFA during the tenure of the Term Loan, except for the following
("Additional PFA"):
o PFA repayment rate of 0.22% with a realised kgV of less than US$47/kgV.
o PFA repayment rate of 0.18% with a realised kgV of greater than US$47/kgV.
o Once the Term Loan has matured in June 2027, the top-up PFA
rate will reduce by a further 80% for the life of mine.
o At the option of Orion, the additional PFA shall rank junior
to the PFA in terms of payment, voting and/or security.
o The additional PFA will be a secured obligation of the Company.
1. Secured Overnight Financing Rate (SOFR) is a broad measure of
the cost of borrowing cash overnight collateralized by Treasury
securities.
2. To be estimated using the foreign exchange rate at the time of closing.
Conditions Precedent to completion
The proposed refinancing is conditional upon, inter alia:
-- Satisfactory confirmatory due diligence.
-- Shareholder, regulatory and nominated adviser approval.
-- Entry into definitive legal documentation.
-- Consent by the Financial Surveillance Department of the South
African Reserve Bank.
-- At Orion's election, any other amendments to the existing
security structure with Nedbank as may be required to implement the
Proposed Refinancing .
Although the refinancing has been approved by Orion's investment
committee, there are certain conditions precedent that need to be
met, including completion of final legal documentation and final
investment committee approval. At this stage there can be no
guarantee the refinancing will be entered into; however, the
Bushveld Management and Orion are confident of completing the
transaction.
Conference call
Bushveld Minerals Chief Executive Officer, Fortune Mojapelo,
Finance Director, Tanya Chikanza, will host a conference call at
12:00 noon UK time (1:00 pm SAST) today to discuss the
announcement. Participants may join the call by dialling:
Tel: United Kingdom: +44 (0) 330 551 0200; South Africa: Toll
Free: 0 800 980 512, USA Local: +1 786 697 3501
Password: Quote Bushveld Minerals - Conference call when
prompted by the operator.
A replay of the conference call will be available on the
Company's website post the call.
Fortune Mojapelo, CEO of Bushveld Minerals commented:
"I am pleased to announce today's proposed refinancing agreement
with Orion and wish to express my and our board's appreciation at
the support and confidence shown by Orion in our business and
future plans.
The proposed refinancing will resolve a large liability that
became current in 2023 and will remove significant near-term
pressure on the Company's balance sheet, in the process supporting
sustainable growth and cash generation of our business.
The new maturity profile is designed to allow the Group to repay
the debt from internally generated cash flows in the years ahead as
we see the benefits of our recent expansion plans at Vanchem come
to fruition.
The proposed restructuring will be conditional upon shareholder
approval which is expected to be sought at a general meeting. I
would encourage all shareholders to vote in favour of the proposed
refinancing. As part of the refinancing Orion has elected to
convert some of the debt into shares at 6 pence per share,
demonstrating their belief in the Company.
The restructuring is an important part of our strategy to
restore value in the Company's share price, ensuring the Company
delivers on its operational targets, simplify its corporate
structure and sharpen its investment proposition."
S
Enquiries: info@bushveldminerals.com
+27 (0) 11 268
Bushveld Minerals Limited 6555
Fortune Mojapelo, Chief Executive
Officer
Chika Edeh, Head of Investor Relations
Nominated Adviser +44 (0) 20 3470
SP Angel Corporate Finance LLP & Broker 0470
Richard Morrison / Charlie Bouverat
Grant Baker / Richard Parlons
+44 (0) 20 7653
RBC Capital Markets Joint Broker 4000
Jonathan Hardy / Caitlin Leopold
Tavistock Financial PR
Gareth Tredway / Tara Vivian-Neal/ +44 (0) 207 920
Adam Baynes 3150
ABOUT BUSHVELD MINERALS LIMITED
Bushveld Minerals is a low-cost, vertically integrated primary
vanadium producer. It is one of only three operating primary
vanadium producers, owning 2 of the world's 4 operating primary
vanadium processing facilities. In 2022, the Company produced 3,842
mtV, representing more than 3% of the global vanadium market.
Bushveld Vanadium is targeting to grow its vanadium production and
achieve an annualised steady state production run rate of between
5,000 mtVp.a. and 5,400 mtVp.a in the near term from existing
capacity. Growth plans to expand to 8,000 mtVp.a. will be pursued,
subject to funding and market conditions. With a diversified
vanadium product portfolio serving the needs of the steel, energy
and chemical sectors, the Company participates in the entire
vanadium value chain through its two main pillars: Bushveld
Vanadium, which mines and processes vanadium ore; and Bushveld
Energy, an energy storage solutions provider.
Bushveld Energy is focused on developing and promoting the role
of vanadium in the growing global energy storage market through the
advancement of vanadium-based energy storage systems, specifically
Vanadium Redox Flow Batteries ("VRFBs")
Detailed information on the Company and progress to date can be
accessed on the website www.bushveldminerals.com
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END
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May 05, 2023 03:00 ET (07:00 GMT)
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