Noble Helium Replaces Convertible Note with $1.46M Shareholder Loan at 12% Interest

Refinancing the Convertible Note

Noble Helium Limited (ASX – NHE) has taken a decisive step to streamline its debt obligations by entering into a new loan agreement worth A$1.46 million with shareholder Duncan MacNiven. This fresh capital injection is earmarked to fully repay the company’s outstanding convertible note facility previously held with Obsidian Global GP, LLC. The repayment extinguishes the convertible note and releases Noble Helium from the associated security interests, marking a significant shift in its financing arrangements.

Terms That Signal Stability

The new loan is structured on commercial and arm’s length terms, featuring a fixed 12% annual interest rate payable quarterly in arrears. Unlike the prior convertible note, this facility is strictly a cash loan with no conversion rights into shares, which may appeal to investors wary of dilution. The loan is secured by a floating charge over the company’s assets and is set to mature on 30 June 2027, providing Noble Helium with a clear repayment horizon and additional working capital to support its operations.

Implications for Noble Helium’s Capital Structure

By replacing convertible debt with a straightforward loan, Noble Helium reduces complexity in its capital structure and potentially improves predictability in its financial planning. The termination of the Obsidian Global GP facility removes a layer of security claims on the company’s assets, which could be viewed positively by other creditors and stakeholders. However, the relatively high interest rate underscores the cost of this capital and the company’s ongoing need to manage liquidity carefully.

Looking Ahead

This refinancing move may also reflect Noble Helium’s strategic intent to maintain shareholder confidence by involving an insider in its funding. While the loan’s maturity in mid-2027 provides breathing room, the company will need to demonstrate operational progress and financial discipline to meet its obligations without resorting to further dilutive measures. Investors will be watching closely for updates on how this capital restructuring supports Noble Helium’s helium exploration and production ambitions.