(Alliance News) - Ncondezi Energy Ltd has restructuring its debt, it said on Tuesday, giving it time to explore future funding options.
Ncondezi has extended its GBP4.3 million funding from lenders by 12 months on the same terms as before, a 12% annual interest rate. The terms also give lenders the chance to swap debt for equity either in full, or at 10 pence per share.
Shares were 3.6% higher on Tuesday afternoon in London at a price of 5.39p each.
The debt comes in the form of a USD2.1 million principal and USD2.2 million of rolled-up interest. Half is owed to Ncondezi's largest shareholder, and 45% to management and board members.
Ncondezi can pay off the original principal of the loan and all interest into Ncondezi shares, at a price of a 25% to 30% premium to the 30-day volume weighted average price.
The company said documentation is being finalised, with lenders agreeing not to call on any debts while this is ongoing. It hopes to finalise the agreement during December.
Chief Executive Hanno Pengilly commented: "Ncondezi is at an advanced stage of finalising the shareholder loan restructuring. The Restructuring will provide additional time to explore future refinancing options and the company has received several refinancing offers to date.
"Management are concentrating on further de-risking the 300 megawatt Ncondezi power project over the next three to six months. and the proposed restructuring will provide the team with sufficient time it needs to do that.
"Over the last year, the loan has been reduced through conversion by more than USD1.3 million, and the company is working to deliver an attractive refinancing solution for shareholders in the future," he continued.
By George Collard; georgecollard@alliancenews.com
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