GSR to clear $51.5 million liability in cash repayment of convertible debentures
Golden Star Resources (GSR) has announced cash repayment of 7 percent of its convertible debentures which matured on August 15, 2021.
The cash repayment of the convertible debentures amounting to $51.5 million was announced on the gold firm’s website.
According to the gold firm, the convertible debentures were subject to certain limitations, convertible into common shares at a conversion rate of 222.2222 per $1,000 principal amount of 7 percent convertible debentures at conversion price of approximately $4.50 per common share.
Cash repayment by GSR settles the convertible debentures in full, thus removing the $51.5 million liability from the company’s balance sheet and the risk of equity dilution.
The convertible debentures, the GSR notes, were issued in August 2016 for $65 million and prior to maturity, $51.5 million were outstanding. Interest on the convertible debentures was payable semi-annually on February 1 and August 1 of each year until maturity on August 15, 2021.
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Speaking on the cash repayment of its convertible debentures, CEO of GSR, Andrew Wray said, “The repayment of the Convertible Debentures is an important step in the strengthening and progression of our balance sheet over the last 18 months. This deleveraging event removes the significantly more expensive facility from our balance sheet and therefore lowers our cost of capital. It is also positive to see the Convertible Debentures repaid in cash, with no equity dilution.
From Q1 2020 to the end of Q2 2021 we successfully halved the Company’s net debt position, while also investing approximately $80m in the business. This has repositioned the balance sheet providing an appropriate funding structure with attractive debt ratios. We therefore look forward to delivering on the future growth of the Wassa mine with a stronger balance sheet and significant investment already completed, at the same time as we are continuing to make good progress on delivering the operational improvements to support a consistent increase in production volumes.”
