International Graphite Ltd (ASX:IG6) has agreed to support major shareholder Comet Resources NL’s bid to return to the ASX via a A$1.5 million secured convertible loan fundraise.
The graphite stock, in which Comet holds 40 million shares and a 24% stake, will seed A$250,000 and act as security trustee on behalf of investors who are also party to the loan.
The loan matures in 12 months, accrues interest at 8% per annum in cash and has a mandatory conversion into new Comet shares if the company returns to the ASX.
Shares will be priced at either A$0.09 per share or a 10% discount to the next capital raise — whichever is lower.
International Graphite chairman Philip Hearse said it was in the best interests of International Graphite that Comet be strong and successful.
“Comet’s holding in International Graphite is an important strategic investment, and we are pleased to support Comet’s plans,” he explained.
Once the loan converts and secures Comet shareholder approval, the company will also distribute a one-for-two option, giving investors a chance to exercise shares at A$0.20 within three years of issue.
Comet also plans to launch an entitlement issue, which will give all eligible shareholders the right to participate, to raise additional funds and meet the financial conditions for reinstatement (should the move get the ASX’s rubber stamp).