(Alliance News) - Vanadium miner Bushveld Minerals Ltd said Friday it agreed to support the merger of redT Energy PLC and Avalon Battery Corp by providing interim funding of USD5 million to help the combination complete.
In July, redT and Avalon agreed to a merger as well as a proposal to raise USD30 million.
Bushveld will provide the USD5.0 million loan to Avalon, which will then provide USD2.5 million in funding to redT.
The funding is required to complete the merger, which currently is resulting in redT consuming cash. The cash will be used to complete due diligence as well as finalise the negotiations for the merger and the USD30 million fundraise proposal.
In a separate agreement with Bushveld, redT has agreed that the USD5 million interim funding will be converted to shares in the combined firm once the merger completes.
"I am delighted that we have secured this interim funding," redT Executive Chair Neil O'Brien said. "It enables us to progress the merger planning with Avalon together with our fundraising and I hope and expect that we will be able to embark on this exciting new phase in the company's development soon.
"We believe the market for storage assets to support renewable energy targets is developing rapidly and the combination of redT and Avalon will be a leading player in this market," O'Brien added. "We are looking forward to working with Bushveld as a partner and strategic investor once we have completed the merger."
Shares in Bushveld closed unchanged at 22.00 pence in London on Friday, redT shares are currently suspended.
By Ahren Lester; ahrenlester@alliancenews.com
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