Electra Battery arranges debt conversion, financing

Executive Summary

• Electra Battery Materials Corp. announced a comprehensive restructuring that will convert ~US$40 M of convertible notes into common equity at US 0.60 per share, reducing outstanding debt by roughly 60 %.
• The company will simultaneously launch a US 30 M equity financing (units at US 0.75 each) that includes a US 10 M conditional commitment from its lenders and a US 2 M short‑term bridge loan to fund working‑capital needs.
• Proceeds are earmarked to complete the commissioning of North America’s first cobalt‑sulphate refinery, repay bridge notes, and support general corporate purposes.

Key Details

• Debt Conversion: ~US$40 M of senior secured convertible notes (8.99% due 2028 & 12.0% due 2027) plus accrued interest will be exchanged for common shares at US 0.60 per share, cutting the remaining debt to ≈US$27 M.
• New Term Loan: The residual 40 % of the notes (plus interest) will be refinanced into a new term loan maturing three years post‑closing, bearing 8.99% cash or 11.125% in‑kind interest.
• Bridge Financing: Lenders will provide US 2 M of unsecured 90‑day promissory notes at 12.0% annual interest; lenders receive the right to appoint one director.
• Equity Offering Structure: $30 M raised via units priced at US 0.75 each; each unit = 1 common share + 1 warrant (exercise price US 1.25, three‑year term).
• Lender Commitment: Includes a conditional US 10 M equity subscription subject to customary conditions.
• Use of Proceeds: Completion and ramp‑up of the Temiskaming Shores cobalt refinery, repayment of bridge notes, and general corporate/working‑capital needs.
• Board Changes: Post‑closing board size will increase from 5 to 7 directors; lenders may appoint up to three members.
• Shareholder & Regulatory Approvals: Transaction pending TSX‑V waiver for pricing, shareholder approval (special meeting expected Oct 2025), and regulatory clearances.
• Potential Excess Proceeds: If gross equity proceeds exceed US$34.5 M, excess will be used to repay notes at par plus accrued interest.

Notable Quotes

“Today marks a turning point for Electra… By equitizing a majority of our debt and securing bridge financing, we are taking decisive action to create a sustainable capital structure and advance the steps required to complete the cobalt refinery.” – Trent Mell, CEO

“By significantly reducing our debt and securing new capital, we are strengthening our financial foundation…” – Marty Rendall, CFO