Champion Iron Ltd. completed a previously announced nonbrokered sale of a C$31.2 million subordinated unsecured mandatory convertible debenture to Glencore Plc unit Glencore International AG.
The debenture will have an eight-year maturity and bear interest at 12% for the first year and then at the same rate as the US$180 million debt financing from Caisse de dépôt et placement du Québec.
The debenture will be convertible at the option of Glencore at any time into Champion shares at C$1.13 per share, including a mandatory conversion clause priced at 85 cents apiece.
Should the company elect to prepay and cancel the debenture for cash before it is converted into shares prior to prepayment, it would grant Glencore share purchase warrants entitling it to acquire, by Oct. 13, 2025, a number of shares equal to the principal amount of debenture repaid divided by the conversion price, at an exercise price equal to the conversion price.
Additionally, Champion unit Québec Iron Ore Inc. granted Glencore off-take rights for life-of-mine of the Bloom Lake iron mine in Quebec, with fixed commercial terms for 10 years for all tonnes of future iron ore production not sold in Japan under an existing off-take deal with Sojitz Corp.
In addition, Glencore was granted a right of first refusal in connection with the financing and off-take rights for iron ore production of Bloom Lake's second phase not allocated to certain strategic investors.
Meanwhile, Jyothish George, Glencore's head of iron ore trading, joined Champion's board, effective immediately.