MZI Resources (ASX:MZI) has fully repaid the US$25.5 million bridge facility, after shareholders approved the final tranche of shares to be issued under its $43 million capital raising.
The repayment simplifies the company's capital structure, while significantly reducing outstanding debt.
It also cuts annual interest payments by US$2.5 million.
Trevor Matthews, managing director, commented:
“Shareholders overwhelming approval of the final tranche of the placement not only significantly improves MZI’s balance sheet and capital structure, but also represents a very telling show of confidence in the Keysbrook Project’s progress toward establishing itself as a globally significant producer of premium quality mineral sands products.
“With the improvement in MZI’s balance sheet from the replacement of debt with equity now finalised, we can focus fully on further optimising operations at Keysbrook, and continuing to grow the international customer base for Keysbrook’s unique suite of high quality products.”
The company said that in light of the lower MZI share price and the recent softening in market conditions for most mineral commodities and resources equities, MZI has decided not to proceed with the previously proposed share purchase plan.
Details of the repayment
At a general meeting in Perth, shareholders overwhelmingly approved the issue of Tranche 3 of the placement.
This comprised 31.1 million shares at $0.40 per share to major shareholder and facility provider Resource Capital Fund VI LP (RCF), and raising $12.5 million needed to repay the outstanding balance drawn under the bridge facility.
Tranches 1 and 2 of the placement were completed in October and November 2015 respectively, raising $30.3 million for debt reduction and working capital purposes, and introducing a range of new shareholders to MZI.
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