Aeris’ Refinancing with WHSP Raises Questions on Shareholder Control and Debt Risks
Aeris Resources has secured a $60 million Guarantee Facility with Washington H. Soul Pattinson, replacing its ANZ environmental bonding, and extended its $50 million Term Facility to August 2026 under favourable terms.
- Executed $60 million Guarantee Facility with WHSP for environmental bonding
- Extended $50 million Term Facility to August 2026, $40 million currently drawn
- First ranking security granted to WHSP over company assets with ASX waiver
- Refinancing offers three-year term, competitive rates, and no mandatory hedging
- Drawdown subject to customary conditions including repayment of ANZ facility
A Strategic Refinancing Move
Aeris Resources Limited (ASX – AIS) has taken a significant step in reshaping its financial structure by executing a new Facility Agreement with Washington H. Soul Pattinson (WHSP). This agreement introduces a $60 million Guarantee Facility designed to provide long-term environmental bonding, effectively replacing the company's previous arrangement with ANZ. Alongside this, Aeris has extended its existing $50 million Term Facility, currently drawn to $40 million, to August 2026.
Terms and Conditions That Matter
The refinancing package offers Aeris a three-year term on the Guarantee Facility with competitive rates and notably no mandatory hedging requirements. This contrasts with other financiers who demanded hedging of approximately half of the company’s copper and gold production, highlighting the commercial appeal of WHSP’s proposal. However, the drawdown of the Guarantee Facility remains contingent on several conditions, including the execution of security documentation and the repayment of the ANZ Contingent Instrument Facility.
Security and Regulatory Considerations
WHSP, a substantial shareholder holding over 30% of Aeris, has been granted first ranking security over the company’s assets to secure both the Term and Guarantee Facilities. This arrangement required an ASX waiver to bypass the usual shareholder approval process due to the related party nature of the transaction. The waiver comes with strict conditions ensuring the security interest is limited to the funds advanced and that any enforcement actions must adhere to fair market principles and shareholder protections.
Why WHSP?
The decision to partner with WHSP follows a competitive process where binding term sheets from third-party financiers were considered. The independent members of Aeris’ board concluded that WHSP’s offer was more commercially acceptable, largely due to the longer term, competitive pricing, and absence of mandatory hedging. Additionally, WHSP’s existing significant stake and understanding of Aeris’ operations provided a strategic advantage over new financiers.
Looking Ahead
This refinancing strengthens Aeris’ financial flexibility and supports its ongoing operations and environmental obligations. It also underscores the company’s commitment to prudent capital management while maintaining strong partnerships with key stakeholders. Investors will be watching closely how the company navigates the conditions precedent and manages its debt profile through to the extended maturity date in 2026.
Bottom Line?
Aeris’ refinancing with WHSP sets a solid foundation but leaves questions on future capital strategy and shareholder oversight.
Questions in the middle?
- Will Aeris fully draw down the $60 million Guarantee Facility and when?
- How might the first ranking security to WHSP affect future financing options?
- What are the implications of the ASX waiver on shareholder influence and governance?
