Jervois Global to delist from ASX, agrees recapitalisation plan
Make us a preferred source
Make us a preferred source on Google
The news: Battery minerals producer Jervois Global has signed a recapitalisation agreement with alternative investment firm Millstreet Capital Management, which will take the troubled company private and provide it with USD145 million ($233 million) in new equity capital.
The numbers: Millstreet's recapitalisation package will include a USD70 million equity commitment to underpin the restart of Jervois' São Miguel Paulista nickel and cobalt refinery in Brazil. Jervois said it forecasts total debt reduction of USD170 million.
The group, which has suspended trading on the ASX, saw its market capitalisation climb above $1 billion in 2022, tracking a surge in global cobalt prices. However, it later plunged to below $30 million in line with a collapse in the price of cobalt, a key ingredient for lithium-ion batteries used in electric vehicles.
The context: Jervois is expected to dispose of its material assets to a nominee of Millstreet and seek ASX approval of its delisting. There is anticipated to be "no return for the current equity holders of the company".
Jervois said it has undertaken "significant diligence and negotiations with third parties, stakeholders and Millstreet in relation to the proposed recapitalisation of the company's balance sheet extending to potential partnerships including joint ventures, sale of its assets and or injections of equity capital into either its assets or the company."
However, "due to several factors including the current cobalt price which is, in real terms, at all-time lows", negotiations failed to provide a better option than the deal reached with Millstreet.
The source: ASX announcement
