Gran Colombia Gold Corp. reined in the size of a planned gold-linked debt offering, revising it to US$95 million instead of US$152 million while dangling holders of near term debt a new pay-back deal.
The gold miner cited investor feedback telling the company to keep debt levels lower, according to a March 22 news release.
In the previous plan, debt proceeds were to be used to repay notes due in 2018, 2020 and 2024.
Now Gran Colombia aims to refinance the 2020 and 2024 senior secured notes and offer 2018 debt holders some cash — 19% of the principal amount — and shares worth 81% of the principal amount based on a US$1.95 per share conversion price.
Meanwhile Gran Colombia tweaked other terms of the proposed debt financing, chopping the term rate to six years from eight and raising the interest rate to 8.25% from 8%.
The offering comprises 95,000 senior secured notes at US$1,000 and 124 share purchase warrants, each exercisable for a common share at C$2.21 until the notes mature.
The notes will be linked to gold. Gran Colombia plans to set aside about 10% of gold production into a trust account and sell the gold quarterly and use cash to amortize the debt.