(Sharecast News) - Metal Tiger has entered into a new AUD 15m (£8.32m) margin lending and drawdown facility, it announced on Wednesday, with a sub-fund of SC Lowy SI II (SG) VCC, which it would use for repaying the AUD 0.85m loan balance outstanding on its previous margin lending facility.
The AIM-traded firm said it would also be drawn down to repay the AUD 7.04m loan against 1,675,125 Sandfire Resources shares secured under the equity derivative financing arrangement with a global investment bank on 16 December.
Following the release of the Sandfire shares, Metal Tiger said it would have 5,012,626 Sandfire shares within the facility against an outstanding loan balance of AUD 8.35m.
The rest of the facility, of AUD 6.65m, would remain available to draw down for at least a year to acquire additional Sandfire shares.
"This facility offers us flexibility on the loans outstanding against the 1,167,542 shares under the equity derivative financing arrangement, giving the company the option to pay off the loan assuming the strike is above the put and below the call, allowing for an effective put entry price into the Sandfire shares under the various collars," said chief executive officer Michael McNeilly.
"In addition, we will now be able to time an entrance to acquire additional Sandfire shares subject to price movements, dramatically increasing the overall liquidity available to Metal Tiger allowing the company to buffer downside risk and maintain exposure to potential upside in Sandfire as it brings the Motheo copper mine into production next year."
At 1502 GMT, shares in Metal Tiger were down 4.08% at 11.18p.
Reporting by Josh White for Sharecast.com.
