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Trident Royalties PLC on Friday said it sold pre-production gold royalties to Franco-Nevada Corp for $15.8 million as it restructured its debt facility with Macquarie Bank Ltd.
Shares in Trident Royalties were trading 11% higher at 52.35 pence each in London on Friday morning.
The royalties were acquired by Trident for around $6.5 million. This means its invested capital more than doubled in around two years.
Chief Executive Officer Adam Davidson said: ‘Whilst Trident is actively seeking to accretively grow the portfolio, the transaction highlights the company’s differentiated approach to value generation by acquiring royalties at an attractive entry value and opportunistically monetizing following growth in the underlying assets.’
The transaction allows Trident to reduce the gold exposure within its portfolio and strengthen its balance sheet for subsequent acquisitions.
Following the disposal, Trident will hold around $35 million in cash, putting the company in a ‘strong position’ to pursue new opportunities and capitalise on current weakness in traditional debt and equity markets.
Separately, Trident restructured its existing debt facility with Macquarie on ‘more favourable terms’, the company said. It reduced the coupon by up to 2%, reducing debt service costs by up to $800,000 a year. Additionally, it deferred principal repayments and extended the term by one year.
‘We are pleased to have the support of Macquarie who, against the backdrop of rising global interest rates, has reduced Trident’s cost of capital and provided further flexibility to support future acquisitions. Trident remains committed to driving down our cost of capital as we mature and see the restructure of our debt facility as another step in this process, with Trident’s cost of debt nearly halving in less than one year,’ Davidson said.
By Chris Dorrell, Alliance News reporter
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