Investor Presentaiton
Armour Energy and controlled entities
armourenergy.com.au
Financial report continued
Notes to the consolidated financial statements continued
NOTE 23. NON-CURRENT LIABILITIES - BORROWINGS
FACILITY TERMS AND SECURITY DISCLOSURES
Corporate bond facility
On 29 March 2019, Armour Energy Limited announced settlement of a new $55 million corporate bond facility, refinancing all
outstanding convertible notes on issue, which were due for redemption in September 2019. The bond also provided additional
funding for exploration and general working capital.
ACCOUNTING POLICY FOR BORROWINGS
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are
subsequently measured at amortised cost using the effective interest method.
NOTE 24. FINANCE COSTS
Consolidated
30 June
2020
$
30 June
2019
$
The main terms of the new corporate bond are as follows:
Issue date of 29 March 2019, with 55,000 new $1,000 corporate bond notes issued raising a total of $55,000,000, before
costs.
Notes will amortise by 52% from 29 March 2021 until and including the day immediately prior to the Maturity Date.
The notes are secured over all of the assets of the Group (other than its shares in Armour Energy International Pty Ltd).
Coupon rate attached is 8.75% per annum, payable quarterly in arrears.
The Maturity Date for the notes is five years from issue date.
Tribeca loan facility
or personal use only
On 26 July 2018, Armour Energy Limited and its subsidiary, Armour Energy (Surat Basin) Pty Ltd (Armour Surat) had entered
into a credit facility agreement (Tribeca Facility Agreement) with Equity Trustees Limited (in its capacity as the trustee of the
Tribeca Global Natural Resources Credit Fund) and Tribeca Global Natural Resources Credit Master Fund (together Tribeca) for
the provision by Tribeca of an environmental bonding finance facility to Armour Surat (the Tribeca Facility). The Tribeca Facility is
secured by a guarantee from the Company, a second ranking specific security over two (2) bank accounts controlled by Westpac
Banking Corporation (the Credit Accounts) in the name of Armour Surat, and a second ranking featherweight security interest over
all the present and after-acquired property of Armour Surat.
The Tribeca Facility has a 9% per annum coupon rate payable by Armour Surat quarterly in arrears on amounts drawn and in
addition, the Company granted 41,000,000 unlisted options to Tribeca to subscribe for ordinary shares (Options) with an exercise
price of A$0.166. The Options will expire on the third anniversary of the first drawdown date under the Tribeca Facility. A Black-
Scholes model was used to determine the fair value of the share options issued at grant date. The following assumptions were used
to determine the fair value of each option:
Interest expense
4,769,248
6,425,620
Financing fees
864,654
73,484
Amortisation of debt facilities and associated issue costs
Unwinding of provision for contingent consideration
Gain (loss) on conversion of convertible notes to shares
Cost of convertible note early redemption
1,477,710
3,307,656
80,857
109,903
(20,519)
3,760,165
NOTE 25. FAIR VALUE MEASUREMENT
FAIR VALUE HIERARCHY
7,192,469
13,656,309
The following tables detail the Group's assets and liabilities, measured, or disclosed at fair value, using a three-level hierarchy,
based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1
Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2
Level 3
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly
Unobservable inputs for the asset or liability
Consolidated 30 June 2020
Financial assets (liabilities) at fair value through other comprehensive income
Total assets
Level 1
$
Level 2
$
Level 3
$
Total
$
1,087,510
1,087,510
1,087,510
1,087,510
90
Underlying share price
Volatility
Risk free rate
Expiry
Vesting
Dividend yield
Exercise price
$0.10
92.045%
2.10%
31 July 2021
Immediate
0%
$0.161
The value of each option was determined to be $0.0485 per option.
Consolidated - 30 June 2019
Level 1
$
Level 2
Level 3
Total
$
$
$
Financial assets (liabilities) at fair value through other comprehensive income
Total assets
2,125,010
2,125,010
Assets and liabilities held for sale are measured at fair value on a non-recurring basis.
2,125,010
2,125,010
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