Hummingbird secures $25m refinancing with Coris Bank

19th Aug 2024 12:20

(Sharecast News) - Hummingbird Resources announced the successful completion of a strategic $25m refinancing package with its principal financing partner, Coris Bank International, on Monday.

The AIM-traded firm said the new financing arrangement, secured at an annual interest rate of 12%, was designed to meet its existing loan obligations due in the second quarter of 2024, effectively deferring those payments for two years.

It said the package came with a 24-month term, including a 12-month grace period on capital and interest repayments.

After the pause, repayments would be scheduled across three tranches beginning in the second half of 2025.

The company said its net debt position would remain unchanged, as the entire amount of the new facility was being used to repay existing obligations to Coris Bank.

Hummingbird said the refinancing was a critical part of its broader financial strategy, designed to strengthen its balance sheet and ensure operational stability as it continued to ramp up production at its Kouroussa and Yanfolila projects.

Commercial production at the sites was expected later in the quarter.

Given that Coris Bank is controlled by the same principal as Hummingbird's largest shareholder, the transaction was classified as a related party transaction under the AIM rules.

The company's directors, after consulting with their nominated adviser Strand Hanson, confirmed that the terms of the refinancing were fair and reasonable for shareholders.

"The refinancing with Coris Bank is a significant step in enhancing Hummingbird's financial resilience," said chief executive officer Dan Betts.

"We fully appreciate the ongoing support and constructive relationship with Coris, which has been instrumental in working through recent challenges and in the development of Hummingbird over the last several years.

"This move not only reduces near-term balance sheet constraints but also helps position us to navigate the current operating environment as we finalise the ramp-up at Kouroussa and target commercial production later this quarter."

At 1151 BST, shares in Hummingbird Resources were up 14.71% at 7.8p.

Reporting by Josh White for Sharecast.com.