Electra Battery Materials Closes US$51 million Secured Convertible Note Offering and Cancels US$36 million of Convertible Notes due 2026

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[{"type":"text","content":"TORONTO / Feb 14, 2023 / Business Wire / Electra Battery Materials Corporation (NASDAQ: ELBM; TSX-V: ELBM) (“Electra”, or the “Company”) announced that it has closed its previously announced private placement offering (the “Note Offering”) of US$51 million principal amount of 8.99% senior secured convertible notes due February 2028 (the “Notes”). As part of the transaction, the Company purchased and cancelled all of the outstanding approximately US$36 million principal amount of the Company’s existing 6.95% senior secured notes due 2026 (the “2026 Notes”) at par, plus accrued and unpaid interest through the date of the closing. The net proceeds of the Note Offering of approximately US$14 million will be used for capital expenditures associated with the expansion and recommissioning of the Company’s hydrometallurgical cobalt refinery, including buildings, equipment, infrastructure, and other direct costs, as well as engineering and project management costs. The initial conversion rate of the Notes is 403.2140 common shares of the Company (“Common Shares”) per US$1,000, equivalent to an initial conversion price of approximately US$2.48 per Common Share, subject to certain adjustments set forth in the indenture governing the Notes (the “Note Indenture”), reflecting a premium of approximately 17.5% to the 30-day volume weighted average price of the Common Shares prior to the date the Note Offering was announced. The Notes bear interest at 8.99% per annum, subject to adjustment in certain circumstances described in the Note Indenture, payable in cash semi-annually in arrears in February and August of each year, provided that during the first 12 months of the term of the Notes, the Company may pay interest through the issuance of Common Shares at an increased annual interest rate of 11.125%. Cantor Fitzgerald & Co. (“CF&Co”) acted as sole placement agent for the Note Offering and received a cash fee equal to 4% of the difference between the principal amount of Notes and the outstanding principal amount of 2026 Notes, a portion of which was satisfied by the issuance of 27,500 Common Shares at a price of US$2.18, as well as a fee of 50,000 Common Shares. The Notes, the Warrants, the underlying Common Shares and the Common Shares have not been registered under the United States Securities Act of 1933, as amended (the “U.S. Securi...

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