Aim-listed Ncondezi Energy is at an advanced stage of finalising the shareholder loan restructuring, which is expected to provide additional time to explore future refinancing options, CEO Hanno Pengilly said in a statement on Tuesday.
Management is concentrating on further de-risking the 300 MW Ncondezi power project over the next three to six months.
The proposed restructuring will provide the team with sufficient time to do that, Pengilly noted.
“Over the last year, the loan has been reduced through conversion by more than $1.3-million and the company is working to deliver an attractive refinancing solution for shareholders in the future,” he added.
Ncondezi has received "in principle" support from all loan holders to enter the loan restructuring proposal, which entails a 12-month extension on existing terms, including a 12% annual interest rate and the option for lenders to swap debt for equity in part or in full at a conversion price of 10p apiece.
Ncondezi also has the right to pay off the original principal amount of the loan, as well as to convert the loan payment into Ncondezi shares at a 25% to 30% premium to the 30-day volume-weighted average price.
Documentation for the restructuring is being finalised for submission to lenders.
All lenders have indicated that they will not call in the loan while the restructuring is being finalised. The loan is currently set to mature on November 30 and is valued at $4.3-million, including $2.1-million principal and $2.2-million rolled up interest.
Fifty per cent of the loan is held by the company's largest shareholder and a further 45% by Ncondezi’s board and management.
The restructuring is subject to the lenders agreeing to the documentation and the necessary related party transaction process being completed by the company's independent directors.
Restructuring documentation is to be finalised and is expected to be completed before the end of December.