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Ncondezi Energy Ltd on Friday said it has finalised its restructuring of a working capital loan into a convertible loan note worth £373,000.
The British Virgin Islands-based power development company is focused on developing an integrated thermal coal mine and 300 megawatt power plant in northern Mozambique.
The convertible loan consists of the restructuring of a £273,000 working capital loan from Seritza Ltd alongside an additional £100,000 provided by non-executive director Scott Fletcher, who provided £80,000, and company chair Michael Haworth who provided the remaining £20,000.
A working capital loan is a loan taken to finance a company's everyday operations. A convertible loan will either be repaid in or convert into equity at a future date.
An additional tranche of £150 may be made available to the company at the convertible loan lender's discretion in the six months following the restructuring.
The loan has an interest rate of 12% and matures in November 2023.
The restructuring is subject to shareholder approval.
Chief Executive Officer Hanno Pengilly said: ‘The terms of the convertible loan provide the company with an attractive short term financing solution, protecting existing working capital and against the dilution of an equity fundraise in the current market. The additional investment from our chair, Michael Haworth and non-executive director, Scott Fletcher provides additional working capital for the company to deliver first results on the 300 megawatt solar photovoltaic project feasibility study and again demonstrates the board's confidence and belief in the long term value creation inherent in the company's projects.’
Shares in Ncondezi Energy were trading 2.6% lower at 0.95 pence each in London on Friday at midday.
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