- Adavale Resources (ADD) has strengthened its balance sheet by converting a “favourable” $1 million convertible note loan
- Under the deal, shares will be converted at a 117 per cent premium to the company’s last closing price at five cents per share
- The convertible note had been sold to several long-term ADD shareholders
- Adavale says the agreement will allow it to better focus on its new Kabanga Nickel Project in Tanzania
- Shares in ADD are trading up 69.6 per cent at 3.9 cents each
Adavale Resources (ADD) has announced more changes – this time strengthening its balance sheet by converting a $1 million convertible note loan.
Adavale has had a transformational last few months, appointing new board members and shifting focus to its African nickel assets.
This latest update will see the company walk free of “all its historical long-term debt” via a “favourable” deal.
The deal is considered promising because Adavale has signed a binding agreement to convert all of the convertible note holder’s interest (the holders are long term ADD shareholders) at a premium.
In particular, shares will be converted at a 117 per cent increase to the company’s last closing price at five cents per share.
Adavale said $1 million face-value convertible notes had accrued interest at eight per cent per annum from April 2017.
With this new agreement, Adavale will be debt-free.
“Conversion of the note frees the company of debt and allows the new board to not only fast track work on the Kabanga North and North East tenements but also actively focus on expanding the company’s portfolio of African nickel sulphide assets,” Adavale’s Interim Chairman Grant Pierce said.
“The board thanks the loyal and long-term shareholders who, at a large premium to market price, removed this debt. The newly appointed board now have a clear runway to progress the company’s strategic plan,” he added.
Shares in Adavale have been trending up for days since the board change was announced. Stock is trading up 69.6 per cent, worth 3.9 cents each at 11.14 am AEST.