WasteCo has issued $700,000 in unsecured convertible notes at 8% interest, set to mandatorily convert upon an expected equity raise within three months. The company also amended $2 million of existing notes, lowering the conversion price and extending maturity.
- Issued $700,000 unsecured convertible notes at 8% interest
- Notes mature 14 August 2027 with conversion price of $0.05833
- Mandatory conversion triggered by upcoming capital raising
- Existing $2 million notes conversion price cut to $0.007 and maturity extended
- Three classes of convertible notes now outstanding with varying terms
New Convertible Notes Positioned for Upcoming Equity Raise
WasteCo Group Limited (NZX:WCO) has secured $700,000 through the issue of unsecured convertible notes carrying an 8% annual interest rate, payable quarterly. These notes mature on 14 August 2027 and offer holders the choice to redeem for cash or convert into shares at a conversion price of $0.05833 each. Crucially, WasteCo expects a material equity capital raising within the next three months, which will trigger mandatory conversion of these notes into shares, effectively accelerating dilution.
Amendments to Existing Convertible Notes Lower Conversion Price and Extend Maturity
Alongside the new notes, WasteCo has renegotiated terms with an existing investor holding $2 million of unsecured convertible notes issued in October 2025. The conversion price on these notes has been cut sharply from $0.02 to $0.007 per share, while the maturity date has been extended to 14 August 2028. These notes carry a higher 10% annual interest rate, reflecting their earlier issuance and risk profile.
Complex Convertible Note Structure Reflects Ongoing Funding Strategy
WasteCo now has three distinct classes of convertible notes on issue: $15 million in secured notes at 6% interest convertible at $0.02 per share with a term ending December 2029; $700,000 in the new unsecured notes at 8% interest convertible by August 2027; and $2 million in the amended unsecured notes at 10% interest convertible by August 2028. The secured notes were issued to Empire Waste Technology Limited following shareholder approval in December 2024, with rights to participate in future capital raises to maintain their ownership percentage.
The company has signalled that funds raised from the new notes will support general corporate purposes. The structure and timing suggest WasteCo is actively managing its capital base ahead of the anticipated equity raise, balancing interest costs and investor dilution. Investors should note the potential for increased share issuance once mandatory conversions occur, which could impact share price dynamics.
Bottom Line?
WasteCo’s convertible note activity sets the stage for a near-term equity raise that will reshape its capital structure and shareholder dilution profile.
Questions in the middle?
- What will be the size and pricing of WasteCo’s upcoming equity capital raising?
- How will the lowered conversion price on existing notes affect shareholder dilution and valuation?
- Will WasteCo’s cash flow support interest payments across its three convertible note classes?