HUMMINGBIRD Resources’ major shareholder is considering converting the company’s growing debt pile to shares and delisting the company.
The UK listed miner said on Wednesday evening that it was unable to repay debt due to a core group of lenders including Coris Bank and CIG which has another company, Nioko, as its largest shareholder.
This followed the further underperformance of its Yanfolila gold mine in Mali and the failure to ramp up Kouroussa, a project it commissioned last year, in Guinea. As a result, CIG will provide $10m in loan finance to Hummingbird – taking unsecured debt owed to the bank to $30m. But it will comes at a cost.
This includes a plan, yet to be finalised, to convert the firm’s debt to shares such that Nioko will become a 71.8% shareholder in Hummingbird, at a proposed conversion price of 2,6777 pence per ordinary share. If concluded, Nioko intends then to delist Hummingbird from the London Stock Exchange.
Prior to a delisting, however, minority shareholders will be given the opportunity of selling their shares in Hummingbird to Nioko at the same conversion price of 2,6777p/share.
Meantime, Hummingbird has reached an agreement with lenders to defer about $30m in repayments due on 31 October 2024 (including accrued interest), representing the debt it was unable to pay, until there is operational efficiency improvements at Yanfolia and as and when the Kouroussa mine ramps up.
Whilst discussions on the debt-to-equity conversion and possible delisting continue, Nioko has had its representative Geoff Eyre appointed at interim CEO, replacing founding CEO Dan Betts who will become Hummingbird’s executive chairman.
Said Betts: “We are navigating through a pivotal period for the company, and the decision to restructure our debt with the support of our Lenders, CIG and major shareholder, Nioko, is a crucial step toward achieving financial stability.
“By extending the payment deadline and converting the new CIG Loan into equity, we aim to provide a solid foundation for our future operations,” he said.
