Noble said on Monday that it was “supportive” of Sundance Resources’ restructuring and its placement of shares with Aust-Sino Resources, a deal which would see the Singapore commodity trader’s holdings of convertible notes cancelled in exchange for cash, shares and options.
The restructuring deal includes the placement of iron ore miner Sundance shares, in two tranches, with Aust-Sino Resources, for a total value of around A$58 million, it said in a filing to SGX before the market open on Monday.
Around A$50 million of the proceeds will be used to cancel Sundance’s convertible notes, it said.
Noble, via its wholly owned subsidiary Noble Resources International Pte. Ltd. (NRIPL), is an existing holder of Sundance’s shares and convertible notes as well as having long term off-take arrangements with the Australian-listed company. The restructuring won’t affect the existing off-take agreements, it said.
In exchange for the notes, NRIPL will receive cash of around A$11.9 million and around 475.8 million new Sundance shares, or an additional 1.5 percent shareholding interest post-placement to Aust-Sino, as well as 2.38 billion options in Sundance, which if fully exercised, mark another 9.7 percent shareholding interest, if none of the other noteholders exercise their options, the filing said.
The exercise price for the options is A$0.02, with the exercise period expiring in September 2023, and are at substantially the same terms as NRIPL’s existing Sundance options, it said.
Noble said the aggregate consideration for the notes’ cancellation was A$27.6 million, compared with their face value of around A$32 million, but the consideration was A$27.6 million above the notes’ book value.
NRIPL started the relationship with Sundance in 2013, when it subscribed for the convertible notes and entered into off-take agreements, it said.
“Since that time, the group has continued to support Sundance as it seeks to develop its flagship Mbalam-Naeba iron ore project which has an estimated indicated JORC resource of approximately 800 million MT of high grade hematite ore,” the filing said. The Mbalam-Nabeba project is located in Central Africa, it noted.
In the off-take agreements, NRIPL has the right to off-take not less than 50 percent of all the iron product produced by the project for its first 10 years of production, Noble said in the filing.
The deal is subject to approvals from shareholders of both Sundance and Aust-Sino as well as regulators, it noted.
Noble said the Sundance restructuring won’t affect its own proposed debt restructuring.
This article was originally published on Tuesday 25 September 2018 at 8:45 A.M. SGT; it has since been updated.