Bens Creek issues $7.6m in new, unsecured loan notes

11th Jul 2023 14:54

(Sharecast News) - Metallurgical coal miner Bens Creek announced the issue of $7.57m in unsecured loan notes to ACAM on Tuesday.

The AIM-traded firm said the issue was a replacement for the previously-issued $6m convertible loan notes (CLNs) to ACAM, which had now been cancelled.

It said the CLNs were initially issued on 14 December 2021, with a repayment due on 31 December 2023.

After negotiations between Bens Creek and ACAM, both parties agreed to cancel the CLNs and accept the newly-issued loan notes as a replacement.

The notes had a term of 18 months, and were not convertible into new shares of the company.

Bens Creek said the terms of the notes were generally similar to those issued to Avani Resources, which it announced on 7 July.

In addition to the loan notes, Bens Creek also granted ACAM a total of 21,082,257 warrants to subscribe for new shares in the company.

The warrants had an exercise price of 28p per share and a lifespan of five years, allowing ACAM to exercise them anytime until 10 July 2028.

Bens Creek said the loan notes agreement stipulated that ACAM would subscribe to a total of $7,567,990 in notes, which would have a term of 18 months, with interest accruing and being repaid as a lump sum at maturity.

The company said it would repay ACAM $2 per tonne of clean coal sold within seven business days of production.

The outstanding principal amount under the loan notes, minus coal payments or other prepayments, would be repayable on the repayment date at maturity.

A simple interest rate of 15.1% per annum would be added to the outstanding principal amount of the loan notes on each repayment date.

That interest would be calculated from the date of issue until the redemption or repurchase of the notes.

The interest would be payable in the same manner as the original principal amount of the loan notes, and would be treated as principal for all purposes.

If Bens Creek chose to redeem or fully repay the notes before the repayment date, it would be required to pay a prepayment calculated at a rate of 15% per annum from the date of issue of the loan notes until the redemption or repurchase date, in addition to the outstanding principal amount.

"The provision of early financial support by ACAM was instrumental in allowing the company to enhance its earthmoving fleet and to substantially complete the initial necessary bench construction to support our high wall miner," said chief executive officer Adam Wilson.

"We are pleased that we have been able to successfully repay in full the convertible loan notes due this summer - announced on 7 July - and we are delighted that ACAM have shown further confidence in the company by entering into these new loan arrangements."

At 1422 BST, shares in Bens Creek Group were up 3.97% at 12.58p.

Reporting by Josh White for Sharecast.com.