Integrated primary vanadium producer and energy storage solutions provider Bushveld Minerals has reached an agreement regarding the repayment of $11.5-million in unsecured convertible loan notes held by Duferco Participations Holding.
The $11.5-million in notes was due to be repaid by November 8 this year.
After negotiations, Bushveld and Duferco have agreed that, on November 8, Duferco will convert $9-million of the principal outstanding under the loan notes into ordinary shares in Bushveld.
Bushveld will also make a cash payment of $2.5-million, plus about $512 000 in accrued interest, to Duferco.
Bushveld has also agreed to pay, on Duferco’s behalf, about $2.2-million, or about R32-million, in working capital adjustment and deferred business completion payment amounts owing to Duferco Vanadium Alloys Proprietary Limited and Duferco Vanadium Proprietary Limited in terms of a business and share purchase agreement entered into between Bushveld, Duferco and other parties in May 2019.
“I am pleased that Duferco will convert $9-million of the principal outstanding under the loan notes into Bushveld Minerals shares, which will reduce our debt position significantly while also making a material reduction at the net debt level, given that most of the repayment will be made using Bushveld shares.
“This will be the final payment of our $53.5-million acquisition, two years ago, of Vanchem – the remaining primary vanadium processing plant in South Africa (and one of only four such operational plants in the world).
“The acquisition structure, which comprised $30.5-million in cash and $23-million in the form of a two-year convertible loan, allowed us to complete the important acquisition at a time, in November 2019, of falling realised vanadium prices that went on to average $23/kg in 2020. Yet, our conviction in the strategic importance of this asset to the company’s quest to establish a significant low cost vertically integrated vanadium platform continues to grow, even as we progress the refurbishment plan to raise Vanchem’s production run rate levels to 2 600 t by the end of 2022, in the process diversifying our vanadium product portfolio while significantly improving Vanchem’s cost position,” comments Bushveld CEO Fortune Mojapelo.
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