Hudson Resources and Lenders Agree to Debt Restructuring and Capital Injection Into the White Mountain Anorthosite Mine in Greenland

VANCOUVER, British Columbia, Aug. 04, 2020 (GLOBE NEWSWIRE) -- HUDSON RESOURCES INC. (“Hudson” or the “Company”) (TSX Venture Exchange “HUD”; OTC “HUDRF”) is pleased to announce that, further to its news release of June 11, 2020, it has entered into definitive agreements (the “Definitive Agreements”) with its existing lenders, Cordiant Capital Inc. and its affiliates (“Cordiant”) and Romeo Fund – Flexi and its affiliates (“Romeo”) (together with Cordiant, the “Lenders”), to restructure the outstanding debt on the White Mountain Anorthosite mine, held by the Company’s subsidiary Hudson Greenland A/S (“Hudson Greenland”), and to provide an injection of working capital to ensure the stability of the mine going forward. 

Debt Restructuring

Pursuant to the terms of the Definitive Agreements, the Company, Hudson Greenland and the Lenders amended the existing loan facilities (the “Loan Facilities”) between the parties to, among other things:

• Convert approximately US$13.7M, of the existing debt of US$42M owed to the Lenders pursuant to the Loan Facilities, into preferred shares of Hudson Greenland, thereby reducing the Company’s interest payments substantially.
• Extend the maturity of the Loan Facilities from July 15, 2025 to January 15, 2028 and push out the first principal payment payable under the Loan Facilities from January 15, 2021 to January 15, 2023;
• Cancel all inter-company debt owed by Hudson Greenland to the Company;
• Reduce the interest rate of the US$10M backstop facility (announced December 18, 2019) from 20% to 9.5% over LIBOR;
• Amend the interest payments terms of the Loan Facilities to enable the Company to pay interest to the Lenders on the consolidated and reduced principal amount every six months in arrears; and
• Give Hudson Resources the option to buy back its interest from the Lenders for 200% of the subscription price.

The conversion of existing debt into preferred shares of Hudson Greenland pursuant to the Definitive Agreements will result in the Lenders holding approximately 69% of Hudson Greenland.  Additionally, the Lenders will have the right to each nominate one director to the Hudson Greenland board, which will be comprised of four members, including one member from Greenland Ventures, a government investment fund that holds eight million shares of Hudson Resources Inc..