LONDON - Nioko Resources Corporation has reached an agreement to make an all-cash offer for the entire issued and to be issued share capital of Hummingbird Resources (LON:HUMR) plc that it does not already own. The offer, valuing Hummingbird at approximately £13.8 million, is recommended by both companies' boards.
Under the terms of the offer, Hummingbird shareholders will receive 2.6777 pence per share. This offer price matches the subscription price under the CIG Subscription Agreement related to a proposed debt-to-equity conversion aimed at addressing Hummingbird's financial challenges. The conversion would increase Nioko's voting rights in Hummingbird from 41.81% to approximately 71.8%.
Hummingbird has been contending with operational issues at its Yanfolila mine, equipment availability, and delays at Kouroussa, resulting in a strained balance sheet and difficulty meeting debt obligations. The company requires substantial equity financing for urgent remediation, creditor payments, and operational improvements.
Geoff Eyre, Chief Executive of Hummingbird, stated that the company requires a significant equity investment to address numerous issues, including infrastructure improvements and creditor overhang. He also noted the need for external funding for upcoming payments, including a $30 million debt repayment due to CIG by the end of December.
The takeover offer is expected to lead to the delisting of Hummingbird from the AIM market of the London Stock Exchange (LON:LSEG), providing an exit opportunity for shareholders ahead of the cancellation. The offer is contingent upon several conditions, including shareholder approval of the Rule 9 Waiver Resolution at a general meeting scheduled for 23 December 2024.
The independent directors of Hummingbird, advised by Stifel and Strand Hanson, have deemed the offer fair and reasonable, considering it in the best interests of independent shareholders.
Nioko, a wholly-owned subsidiary of CIG, currently holds approximately 41.81% of Hummingbird's issued share capital. The offer is part of a broader strategy by Nioko and its parent company, CIG, owned by Burkinabe entrepreneur Idrissa Nassa, to consolidate their control over Hummingbird.
The transaction is anticipated to become effective in the first quarter of 2025, subject to the satisfaction or waiver of the conditions set out in the offer agreement. This information is based on a press release statement.
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