https://www.globenewswire.com/en/news-release/2023/12/06/2791548/...

https://www.globenewswire.com/en/ne...Support-Agreement-and-New-Equity-Capital.html

5E Advanced Materials Announces Restructuring Support Agreement and New Equity Capital
Agreement strengthens capital structure and balance sheet, bringing in up to $35 million of new equity capital, helping to fund the next stage of mining and small-scale facility for boric acid and lithium production

HESPERIA, Calif., Dec. 06, 2023 (GLOBE NEWSWIRE) -- 5E Advanced Materials, Inc. (Nasdaq: FEAM) (ASX: 5EA) (“5E” or the “Company”, a boron and lithium company with U.S. government Critical Infrastructure designation for its 5E Boron Americas Complex, today announced that it has entered into a Restructuring Support Agreement (“RSA” with its primary lender and the holder of the Company’s senior secured convertible notes, BEP Special Situations IV, LLC (“Lender”, along with new strategic investors ("New Investors”, to restructure the Company’s capital and secure new capital (the “Transaction” that will enable the commencement of initial mining operations and production of boric acid and lithium.

Agreement Highlights
The Company has agreed to a funding package with its Lender and the New Investors for the following:

• The New Investors to commit up to $25m USD under the Transaction and the terms of the Company’s existing senior secured convertible notes to be amended to reduce the conversion rate, extend the maturity date by one year and increase the paid-in-kind interest rate to ten percent (10%).
• Bluescape Special Situations IV, LLC provided an option to invest an additional $10M USD under the Transaction.
• The New Investors to acquire 50% of the outstanding principal amount of the convertible notes from the Lender under the RSA.
• Pursuant to the previously announced Standstill Agreement, the Lender has agreed to reduce the minimum required cash covenant in the notes to zero until June 28, 2024. Upon the closing of the Transaction, the Notes will be amended to provide for a minimum required cash covenant of $7.5M USD beginning June 28, 2024.

The Transaction will further secure the Company’s pathway to operations and the extraction of boric acid and lithium at its 5E Boron Americas complex. This comes on the heels of 5E’s recent authorization from the Environmental Protection Agency (EPA), to begin In-Situ mining operations, helping facilitate the Company’s mission of becoming the leading domestic supplier and producer of critical materials boron and lithium.

The Board of Directors have added Stefan Selig to the board, effective December 5, 2023. Mr. Selig brings valuable experience through his tenure as executive vice chairman of global corporate and investment banking at Bank of America Merrill Lynch and as President Obama’s Under Secretary for International Trade at the Department of Commerce, experience that the Company will look to utilize as it engages more deeply in discussions with government entities and advance additional financing conversations.

The Transaction is supported unanimously by the Board of Directors. The closing of the Transaction remains subject to the satisfaction of all remaining closing conditions, including the 5E stockholder vote, to be held at the upcoming special stockholder meeting.

“We are pleased to finalize the Agreement with our existing Lender and New Strategic Investors to strengthen our balance sheet and enable the move to commence initial mining operations of boric acid and lithium in the new year,” said Susan Brennan, Chief Executive Officer of 5E Advanced Materials. “With the recent receipt of authorization from the EPA allowing 5E to begin in-situ mining, 2024 looks to be a transformational year for the Company and the Transaction helps to secure our immediate future, providing 5E with capital support while expanding our opportunities for additional commercial and financing discussions.”