Ahead of a looming April deadline for a $US212 million convertible bond repayment, uranium miner Paladin Energy has announced a proposal to restructure its balance sheet by converting some debt into equity, extending the maturity date of the remaining amount, and undertaking a $US75 million capital raising.
Debt-laden Paladin has been in discussions with some of its stakeholders and convertible bond holders since early last month, after plans to sell off a 24 per cent stake in its Langer Heinrich mine to China National Nuclear Corporation for $US190 million were delayed.
It now appears unlikely the deal will be finalised in time for Paladin to meet its April deadline.
Today, Paladin revealed a restructure proposal that includes: exchanging $US362 million, which comprises all outstanding 2017 convertible bonds and 2020 convertible bonds, into $US115 million of new secured bonds due in 2022 with a 7 per cent cash coupon; and $US102 million of 2024 convertible bonds with a zero coupon and a conversion price of 7 cents per share.
It will also convert some of that $US362 million into $US145 million worth of Paladin shares at 5 cents each.
Under the deal, for every $US1,000 in principal of the existing convertible bonds, holders will receive 10,929 shares, equal to 40 per cent of the value at an issue price of 5 cents per share.
The proposal is subject to a number of conditions, including Paladin successfully completing a minimum $US75 million capital raising, the details of which are yet to be disclosed.
“The restructure proposal is the result of having had discussions with a number of key stakeholders over the past few weeks,” Paladin said in a statement.
“To date, bondholders that have entered into commitment deeds to support the restructure proposal own bonds representing 57 per cent of the 2017 convertible bonds and 41 per cent of the 2020 convertible bonds.
“In order to implement the restructure proposal, the company will require the support of bondholders representing up to 75 per cent of each of the 2017 and 2020 convertible bonds.”
Chief executive Alexander Molyneux said he was pleased the company’s bondholders were supporting the company with a viable restructure, in the absence of the Langer Heinrich stake sale.
“Paladin will have a manageable debt load with a longer-term repayment profile, which means the company is better positioned to ride out the current poor uranium market conditions and generate upside for shareholders when uranium prices have recovered,” he said.
Paladin shares were 16.8 per cent lower to 7.9 cents each at the close of trade.
