MinRes refinances Empire debt

Mineral Resources has bolstered its new relationship with Empire Oil & Gas, offering a $15.1 million facility to replace a previous deal with Viburnum Capital.

Empire will use the facility to refinance a $15 million debt obligation with ERM Power.

ERM sold its Empire stake to MinRes just two weeks ago in an $8.9 million off-market deal.

Empire has less than two months to pay what it owes to ERM.

In a statement, Empire said as a result of the new facility with MinRes it had backed out of arrangements with Wyllie Group-backed Viburnum in relation to their proposed loan facility.

“In addition, a condition precedent of the revolving working capital facility is the issuance to Mineral Resources of 7.5 million Empire options over new unissued shares, with an exercise price of 50 cents and a term of two years,” Empire said in a statement.

“The exercise price of the options represents a 37 per cent premium to the last closing price of Empire ordinary shares.”

Empire chairman Tony Iannello said the company was pleased to further strengthen its relationship with MinRes through the facility.

“The terms of the proposed funding package are attractive to Empire shareholders, superior to any alternative offer, and will provide a stronger funding platform to accelerate Empire’s growth,” he said.

Empire shares were unchanged at 36.5 cents each at the close, while MinRes shares were 0.4 per cent lower to $8.31 each.