China Steel Australia (CSA) has successfully wiped $52 million in debt via a debt equity swap with multiple lenders.
The Brisbane-based company announced yesterday that the swap will be at an issue price of 30 cents a share, which it said represents a 100% premium over the volume weighted average price (VWAP) for the five days ending 19 January.
The options will have an exercise price of 36 cents, an expiry date of 22 February 2012 and will be issued for nil consideration, CSA said.
According to CSA chief executive Chen Lidong, the removal of the debt will allow the company to move into the future in a strong financial position as it reacts to strong customer demand.
“With our significantly restructured balance sheet and enhanced liquidity, we will move forward from a very solid financial foundation,” he said in a statement.
“This is a pleasing result following recent announcements about strong demand from Chinese customers, which has resulted in the company achieving 100% production capacity.
“We have recently ramped up our production, we are gaining stronger demand from Chinese domestic construction and consumer appliance industries and we are seeing a gradual recovery in nickel prices.”
CSA has a total debt of $54 million with four different lenders, with the latest equity swap involving three of those lenders.