Proactive Investors - Metal Tiger PLC (LON:MTRM), an investor in natural resource companies, said it entered into a new A$15mln (£8.3mln) margin lending and drawdown facility with a sub-fund of SC Lowy SI II (SG) VCC.
The new facility will be used partly to repay the approximately A$0.85mln loan balance outstanding on the previous margin lending facility and be drawn down to repay the A$7,042mln loan against about 1.68mln Sandfire Resources Ltd shares secured under an equity derivative financing arrangement with a global investment bank.
Metal Tiger completed the sale of 1.3mln Sandfire shares on December 6.
“This facility offers us flexibility on the loans outstanding against the 1,167,542 shares under the equity derivative financing arrangement, giving the Company the option to pay off the loan assuming the strike is above the put and below the call, allowing for an effective put entry price into the Sandfire Shares under the various collars.
Following the release of the Sandfire shares, Metal Tiger will hold about 5.0mln Sandfire shares within the facility against an outstanding loan balance of A$8.345mln.
The remainder of the new facility, about A$6.65mln, will remain available to Metal Tiger to draw down for at least a year from today’s date to acquire additional Sandfire shares.
“We will now be able to time an entrance to acquire additional Sandfire shares subject to price movements, dramatically increasing the overall liquidity available to Metal Tiger allowing the company to buffer downside risk and maintain exposure to potential upside in Sandfire as it brings the Motheo copper mine into production next year,” said Metal Tiger chief executive Michael McNeilly.
Effective from 16 December 2022, Metal Tiger will hold 6.18mln shares, about 1.39%, in Sandfire.