Bushveld Minerals Limited (LON:BMN), a diversified mineral development company with a portfolio of vanadium, tin and coal assets in Southern Africa, has today announced that the Company has agreed to issue up to £8.0 million of unsecured convertible bonds to UK based fund, Atlas Capital Markets Limited, and its New York based joint venture company, Atlas Special Opportunities Limited (collectively the “Investor”). Further information on the Investor is disclosed at the end of the announcement.
Details of the Convertible Bond:
· A total fundraising of up to £8.0 million through the creation and issuance of convertible bonds, with denomination of £25,000 each, which bear a coupon of 7.5 per cent per annum and have a maturity date of two years from the date of issuance (the “Maturity Date”) (the “Convertible Bonds”). The Convertible Bonds are issued at 98 per cent of face value.
· The Convertible Bonds will be issued in two tranches, the first tranche of £4,500,000 (“First Tranche”) was issued on 22 September 2017, upon receipt of funds by the Company. The second tranche of £3,500,000 (“Second Tranche”) is to be issued at the Company’s discretion forty working days (which can be shortened by mutual agreement) after the date of issuance of the First Tranche, conditional upon receipt of funds by the Company and satisfaction of certain conditions precedent. It is the Company’s current intention that it will issue the Second Tranche and a further announcement will be made at that time.
· The Convertible Bonds are convertible into BMN ordinary shares at a price equal to the average of five days volume weighted average price (as published by Bloomberg) determined over the ten trading days immediately prior to receipt of a conversion notice by the Company from the Investor.
· The Investor has agreed not to convert more than 25 per cent of the Convertible Bonds outstanding during every period of three calendar months (i) from 1 October to 31 December; (ii) from 1 January to 31 March; (iii) from 1 April to 30 June; and (iv) from 1 July to 30 September, subject to certain exceptions, and agrees not to short sell and/or borrow BMN ordinary shares at any point during the twenty-four month period from the date of issuance of the First Tranche.
· A total of 6,250,000 warrants over BMN ordinary shares will be issued as part of the First Tranche and should the Company elect to issue the Second Tranche, a further 4,861,111 warrants will be issued. The warrants have a three year term, a strike price of 14.4p and are exercisable at any time.
· The net proceeds receivable from the issue of the First Tranche will be applied to further developing the Company’s vanadium and tin platforms, as well as providing general working capital. The net proceeds from the Second Tranche, assuming it is issued, will be applied in the same way.
· The Company has the option to redeem the Convertible Bonds prior to the Maturity Date at 105 per cent of the face value of the outstanding Convertible Bonds to be redeemed. If a material change of ownership (being the acquisition of ownership of, or voting control or direction over, more than 50% of the issued and outstanding shares of the Company) occurs, or certain events of default occur, the Investor has the right to request redemption of all or part of the outstanding amount at 105 per cent of the face value of the outstanding Convertible Bonds to be redeemed.
· On the Maturity Date, any unconverted Convertible Bonds will be converted into BMN ordinary shares, with such number of ordinary shares determined by dividing the principal amount of the unconverted Convertible Bonds by the average of the lowest three days volume weighted average price (as published by Bloomberg) during the period of fifteen consecutive trading days prior to the Maturity Date.
Fortune Mojapelo, CEO of Bushveld Minerals Limited, commented: “The Convertible Bonds provide the required capital to enable the Company to continue to deliver on its strategy to build the world’s largest, lowest cost and most vertically integrated vanadium platform whilst also creating a standalone African focussed tin champion. The agreed limitations on conversion and retained early redemption option give us flexibility as we continue to grow the Company.
We are pleased to have established a new relationship with Atlas Capital Markets and Atlas Special Opportunities, with whom we look forward to working in future.”
