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Highlights
- Chariot Corporation Ltd (ASX:CC9) secures up to A$2 million through convertible notes.
- Initial drawdown of A$600,000, with potential for additional funding within a year.
- Flexible capital solution supports exploration projects with minimal share dilution.
Chariot Corporation Ltd (ASX:CC9) has successfully entered into a strategic agreement to raise up to A$2 million by issuing convertible notes. This financial maneuver provides the company with an initial drawdown of A$600,000, while keeping the option open to secure up to an additional A$1.4 million over the next 12 months. The notes issued have a face value of US$1.15 and offer conversion at A$0.14 per note, with each note maturing 12 months after the issue.
Convertible notes are a type of debt that investors can convert into a specified number of shares of the issuing company's stock, making them an attractive option for both companies and investors looking for flexibility and potential gains. For Chariot, this method of financing is particularly strategic as it allows the company to access necessary funds while minimizing dilution for existing shareholders—a common concern with standard equity financing methods.
The terms of the agreement include a redemption option that allows Chariot to redeem the notes at any time before maturity at a premium to the face value, providing a beneficial exit strategy for both the company and note holders. Additionally, the notes feature a non-conversion period lasting until 1 June 2025, after which the notes can be converted into shares at the discretion of the holders, giving investors an opportunity to participate in the company's potential growth.
This convertible note facility is a critical component of Chariot's capital management strategy, particularly in the current challenging lithium market. Managing Director Shanthar Pathmanathan highlighted the importance of this financial strategy, stating that it offers the company the necessary capital flexibility to continue its exploration endeavors with reduced equity dilution risk.
With the lithium market facing numerous challenges, such as price volatility and increased competition, Chariot's approach to securing funding through convertible notes demonstrates a prudent and strategic approach to financial management. The company aims to use this newly acquired funding to further its exploration projects and enhance shareholder value, navigating through market challenges with innovative financial solutions.
Chariot Corporation Ltd (ASX:CC9)’s latest financial strategy not only ensures the company remains well-funded but also positions it advantageously in a competitive industry, aiming for sustainable growth and shareholder value enhancement. This move is a testament to the company’s proactive approach in managing capital in a way that aligns with its long-term strategic goals.
