Largo Resources Ltd. and its Vanadio de Maracás SA unit signed a binding term sheet to restructure and convert Vanádio's existing debt facilities with Banco Pine SA, amounting to about 97.8 million Brazilian reais including accrued interest, Largo said March 8.
The facilities are guaranteed by Largo, and under the deal, Largo will acquire about US$9 million of the outstanding amount, while the terms of the remaining debt will be amended.
Revised terms include a seven-year maturity from the date of execution and a floating interest rate equal to 115% of the Brazilian interbank rate.
Any interest accruing in the first 12 months from Largo's initial US$9 million payment will be paid at the end of the same year. Interest will be paid on a semiannual basis afterward until December 2021 and on a monthly basis from January 2022 until maturity.
No outstanding principal will be repayable until 2021, at which time 1% of the principal will be due. Subsequently, 5% of the principal will be repayable in 2022, 15% in 2023 and all remaining payments to be made monthly in 2024 until December of the same year. Vanádio will also have the right to prepay the outstanding amount under the restructured facility at any time.
According to Largo President and CEO Mark Smith, the restructuring forms part of the company's efforts to improve its capital structure and drive better results.
As of March 7, US$1 was equivalent to 3.24 Brazilian reais.
