LONDON - Hummingbird Resources PLC (AIM: HUM), a mining sector company, has announced the publication of a circular and notice of a General Meeting, which outlines a critical debt restructuring plan through a debt-to-equity conversion. The company is addressing financial challenges due to operational difficulties, including equipment shortages and working capital constraints at its Yanfolila and Kouroussa projects.
The proposed restructuring involves a conditional agreement with CIG SA and Nioko Resources Corporation, converting approximately $30 million of debt into new ordinary shares at a price of 2.6777 pence each. This conversion is expected to elevate Nioko's voting rights from 41.81% to approximately 49.9% after the first stage and further to about 71.8% upon completion of the second stage.
Nioko has also expressed intentions to make an offer for the remaining shares of Hummingbird Resources at the same conversion price, potentially leading to the company's delisting from the AIM market. This offer is contingent on announcing the firm intention to make an offer before the General Meeting scheduled for December 23, 2024. If not announced in time, the meeting may be adjourned to allow shareholders sufficient time to evaluate the offer.
Hummingbird Resources faces looming debt repayments and credit support renewals totaling around $68 million by December 31, 2024. The company's board cautions that failure to pass the necessary resolutions for the debt-to-equity conversion could lead to administration or an alternative insolvency process, likely resulting in little to no return for shareholders.
The circular, which has been sent to shareholders and is available on the company's website, provides detailed information regarding the debt restructuring process, the potential offer, and the implications for shareholders. The company encourages shareholders to review the circular thoroughly before taking any action.
This announcement is based on a press release statement and contains information defined as inside information under the Market Abuse Regulation EU No. 596/2014, now in the public domain.
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