- Firering Strategic Minerals (DI)
- 15 November 2024 15:21:03
Source: Sharecast
The AIM-traded firm said the funding formed part of a broader £1m bridge loan facility, which prioritised non-dilutive strategies to enhance shareholder value.
It said the bridge loan notes, subscribed primarily by existing shareholders, would accrue interest at 15% annually, payable semi-annually, with a minimum 15% return for early repayment within 12 months.
Proceeds from the first tranche would finance a $1.02m payment due by 31 December, enabling Firering to increase its stake in Limeco from 10% to 16.7%.
The company said it retained the option to issue an additional £0.15m under the facility, and would disclose further subscriptions as they occur.
At the same time, Firering said it had applied for a $7.5m loan from a leading Zambian bank to fund the remaining balance of the Limeco acquisition and an additional 24.5% stake, which would bring its total interest to 45%.
The proceeds would also be used to repay the bridge loan.
Firering said it expected the quicklime project to generate significant cash flow on commissioning in the fourth quarter, complementing Limeco’s already positive operational cash flow.
“This non-dilutive unsecured bridge loan, which saw strong participation from existing shareholders, enables us to maintain full shareholder value as we accelerate Limeco's quicklime project toward phased commissioning beginning in the fourth quarter of 2024,” said chief executive officer Yuval Cohen.
“In parallel, we have submitted a loan application to a major Zambian bank, with the objective of financing the remainder of the Limeco acquisition increasing our stake to 45% and to repay the bridge loan.
“Funding strategies are always a priority for growth businesses, so we are pleased to have successfully navigated this initial funding process, positioning Firering to take full advantage of this exceptional opportunity that promises to generate significant cash flow.”
At 1502 GMT, shares in Firering Strategic Minerals were up 7.07% at 5.3p.
Reporting by Josh White for Sharecast.com.