Hazelwood Resources (ASX:HAZ) has had joy securing loans that raised $1.65 million that would see it move to the next stage of a recapitalisation plan that includes an entitlement share offer.
The second-ranking, convertible notes were issued to sophisticated and professional investors and exceeded minimum target raising of $1.25 million.
The debt carries an interest rate of 12% per annum payable in new shares in Hazelwood or cash.
The debt will provide working capital through the recapitalisation process.
The recapitalisation will comprise an issue of convertible notes and an entitlement issue.
Hazelwood has agreed to issue to the lenders Convertible Notes for the principal sum of the loan funds.
A 9-for-10 pro rata non-renounceable entitlement issue at $0.01 per share will seek to raise up to $11.6 million to repay the Siderian Debt Facility.
The issue is subject to a minimum subscription of $6.5 million.
Hazelwood is looking beyond the capital raisings to resume and expand production at the ATC ferrotungsten plant under new executive chairman, Mark Warren.
The plant in Vietnam is one of the largest, most advanced operating ferrotungsten plants in the world.
GMP Securities Australia and Hartleys acted as joint lead managers to the issue of subordinated, second-ranking, debt.
The shares will remain suspended as the company finalises recapitalisation funding plans.
