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Africa|Business|Energy|Storage|Solutions
africa|business|energy|storage|solutions

Bushveld Minerals reaches agreement on settlement of $11.5m in loan notes

27th October 2021

By: Creamer Media Reporter

     

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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.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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