Kalium Lakes restructures its debt but must raise $20 million in equity

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Capital increase heavily discounted

Kalium Lakes’ fundraising plans were well flagged to the market, but it quickly moved the timeline forward after the stock price took off in a no-deal roadshow last week.

After about a week of polling fund managers, he mailed the terms of a deep-discount placement Tuesday morning.

Its cash call was structured as a two-tranche equity offering of $22 million, priced at 4¢ per share, a steep discount of 56.5% from Kalium’s last stock price, the August 9. It was also 41.3% lower than the 10-day volume-weighted average price.

He planned to follow through with an $8 million stock purchase plan.

Kalium’s main shareholder, Greenstone Resources, which owns 19.6% of the ledger, had agreed to take $10 million from the placement. And its directors would tip $1.5 million subject to shareholder approval.

It means Kalium brokerages Morgans and Foster Stockbroking must pull another $10 million from equity investors, who have largely exited the stock after production delays and cost explosions, before Kalium can meet its terms. prerequisites for debt restructuring.

Assuming the stock purchase plan raises no funds, Greenstone would end up owning 27.8% of the company.

The placement and the SPP would leave Kalium $74 million to spend, which would be just enough to cover the $33.1 million for capital expenditures, $9.1 million for debt service interest , $4.9 million for financing and debt restructuring costs and $26.9 million for working capital and equity. offer fees.

Kalium is expected to be cash flow positive at current sulphate of potash prices when it reaches 80 kilotonnes per annual operating rate in the first quarter of 2023.

Offers for placement were due Tuesday at 6 p.m.

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