Sigma Lithium Raises Convertible Note Offering to $125 Million
Key Facts
Sigma Lithium raised the size of its convertible note offering to $125 million, saying its fixed coupon of 7.00% per year will replace the 11.45% floating rate on its previous secured debt. The company plans to use the net proceeds to repay all amounts due under its debt agreement with Synergy Capital. Any remaining proceeds will go toward growth capital expenditures and general corporate purposes, according to the company. The offering refinances maturing debt, lowers cash interest costs and extends the term. The transaction is expected to close on or about November 16, 2026, after regulatory and exchange approvals are secured.
Company data show net debt of $125 million as of September 30, 2026, of which $97 million represented principal and accrued interest under the secured debt agreement with Synergy Capital. These figures show the size of the obligation the transaction is intended to repay, as the unsecured notes replace existing secured financing. The company said the shift from a floating rate to a fixed coupon will reduce cash interest costs. The new offering matures around November 2031, extending the repayment date compared with the previous debt. Noteholders can, however, require redemption at 100% of principal at the end of the third year, around November 2029.
The offering combines a maturity around November 2031 with the option for investors to require early redemption at the end of the third year. The notes also include an option to convert into shares at a 25% premium after the lock-up period, according to details announced by the company. This gives the company an unsecured alternative to its existing debt, while allowing investors a path to convert into shares, alongside the right to require repayment of principal at the specified time. The trade-off comes as the company seeks to refinance debt and lower cash interest costs. Closing remains subject to regulatory and stock exchange approvals, including approval from the TSX Venture Exchange.
As background to the financing, the company said cash and cash equivalents stood at $10 million as of September 30, 2026. It estimated potential short-term liquidity sources after that date at up to $62 million, depending on the timing of sales and lithium prices. These potential sources remain tied to those conditions, while the note offering would allow the company to direct net proceeds first to repaying secured debt, then to growth capital expenditures and general corporate purposes. Third-quarter data provide an accompanying view of operations: the company recorded production of 7,293 tonnes, gross revenue of $23 million and a gross margin of 32% in the quarter ended September 30, 2026. Revenue was 23% below $30 million in the third quarter of 2025.
Sigma Lithium also cut its 2026 all-in sustaining cost guidance by 6% to $668 per tonne, from $710, and kept its 2027 guidance at $620 per tonne. These figures form part of the company’s operating and financial backdrop for pricing the offering, alongside third-quarter production, revenue and margin data. In the market, SGML shares closed at $5.21 on November 2, 2026. They had closed at $8.45 on October 27, then $8.30 on October 28, $7.66 on October 29 and $7 on October 30. The note transaction is scheduled to close on or about November 16, 2026, subject to the required approvals.