RE: 2.6p - quite reasonable really6 Nov 2024 17:42
Despite the best efforts of the Company, the continued challenges around operational performance at Yanfolila, equipment availability, working capital constraints and further delays in the ramp up of operations at Kouroussa (as detailed further in the Company's announcement earlier today), have placed significant strain on Hummingbird's balance sheet and ability to meet near-term debt repayment obligations.
Proposed Debt-to-Equity Conversion and Possible Offer
To address the Company's immediate obligations, CIG is providing, on 6 November 2024, the outstanding US$10m loan referred to in the Company's announcements of 27 September 2024 and 1 November 2024, and following the latest advance the Company now has approximately US$30m of unsecured debt due to CIG (the "New CIG Loan"). Alongside this advance, CIG has proposed, and Hummingbird's Board has agreed in principle, to a debt-to-equity conversion by CIG, whereby the principal amount outstanding under the New CIG Loan would be converted into new ordinary shares in the capital of the Company to be issued to CIG's subsidiary, Nioko, at a conversion price of 2.6777 pence per Ordinary Share increasing its voting rights to approximately 71.8% (the "Debt-to-Equity Conversion") on the terms further described below.