Shuka Minerals Plc (AIM/AltX: SKA) has received a conversion notice from chief executive Richard Lloyd covering the full £100,000 principal amount of a loan previously assigned to him.
The debt will be converted into 2,500,000 new ordinary shares at 4p per share.
The transaction extinguishes the £100,000 principal through an equity conversion rather than a cash repayment, preserving cash within the business.
Following admission of the conversion shares, Shuka will have 175,548,474 ordinary shares in issue.
That implies approximately 173.05 million shares were in issue before the conversion, meaning the 2.5 million new shares increase the existing share count by around 1.4%.
Lloyd will also receive warrants over a further 2,500,000 shares, exercisable at 8p per share until 20 July 2029.
If exercised in full, those warrants would generate £200,000 of cash for Shuka, although they would also create additional dilution.
Following admission, Lloyd will hold 5,442,136 shares, representing approximately 3.10% of Shuka’s enlarged issued share capital. Admission of the conversion shares to AIM is expected at 8am on or around 8 October 2026.
For investors, the transaction has two immediate effects: Shuka removes £100,000 of debt without consuming cash, while its CEO materially increases his direct equity exposure to the company.
The trade-off is dilution from the 2.5 million conversion shares and the possibility of a further 2.5 million shares being issued if the 8p warrants are exercised.
The warrants would only become economically attractive if Shuka’s share price rises above their 8p exercise price, in which case the company would also receive additional funding.
For investors, the key point is therefore that the balance sheet improves modestly through debt conversion, while management alignment increases through Lloyd’s enlarged 3.10% shareholding and further warrant exposure.
Investor takeaway: Shuka Minerals chief executive Richard Lloyd has converted the full £100,000 loan assigned to him into 2.5 million shares at 4p, removing that liability from the balance sheet without using cash. He will also receive warrants over another 2.5 million shares at 8p, creating additional potential dilution if exercised.
