Kenmare Resources New Debt Facilities
December 11 2019 - 2:00AM
UK Regulatory
TIDMKMR
Kenmare Resources plc ("Kenmare" or "the Company")
11 December 2019
New debt facilities
Kenmare Resources plc (LSE:KMR, ISE:KMR), one of the leading global
producers of titanium minerals and zircon, which operates the Moma
Titanium Minerals Mine in northern Mozambique, is pleased to announce
the signing of debt facilities with Absa Bank Limited (acting through
its Corporate and Investment Banking Division) ("Absa"), The Emerging
Africa Infrastructure Fund (a PIDG Company) ("EAIF"), Nedbank Limited
(acting through its Nedbank Corporate and Investment Banking division)
("Nedbank"), Rand Merchant Bank and Standard Bank Group ("Standard
Bank"). Rothschild & Co. acted as financial adviser to the Company on
the transaction.
The new debt facilities comprise a US$110 million Term Loan Facility and
a US$40 million Revolving Credit Facility. They will be used in part to
repay in full the existing Senior and Subordinated Project Loans, of
which US$64 million is outstanding, and for working capital purposes.
The new debt facilities also provide for a future Mine Closure Guarantee
Facility of up to US$40 million, sharing in security.
Statement from Tony McCluskey, Finance Director:
"The new facilities will support the continued growth of our business as
well as extending the maturity profile of our debt beyond the current
short period of increased capital expenditure. It is also particularly
pleasing to replace the existing project loans with much more flexible
corporate facilities, underlining the Company's progress into a leading
global mineral sands producer.
Our planned increase in production volumes by more than 20% from 2021
will enable us to expand our product margins and position us in the
first quartile of the industry revenue to cost curve, as well as to
deliver increased cashflow stability. The original debt facilities were
provided on terms that supported the building of the Moma Mine. However,
given the strength of core cash flows being generated by the Moma Mine,
the facilities provided by the new lender group, which includes both new
and existing lenders, provide additional financial flexibility and are
more suitable for Kenmare's position as an established producer."
Overview
-- New debt facilities provided by existing lenders (Absa and EAIF) and new
lenders (Nedbank, Rand Merchant Bank and Standard Bank)
-- Proceeds of the initial drawdown will be used to prepay in full the
Company's existing US$64 million Project Loans, and to pay fees and costs
associated with the financing
-- The new facilities provide the Company with additional financial
flexibility as a result of the extended maturity profile and increased
liquidity
-- Key financial covenants: interest cover ratio of >4.00 times; net debt to
EBITDA of <2 times; Debt Service Cover Ratio of >1.2 times; and minimum
liquidity of US$15 million
-- Distribution covenants: net debt to EBITDA of <1.5 times; and minimum
liquidity of US$25 million
-- Availability of the new debt facilities is subject to the satisfaction of
customary conditions precedent, which will be completed as soon as
practical
The existing Project Loan facilities have an interest rate of 4.75% +
LIBOR until 1 February 2020 and 5.5% + LIBOR thereafter until final
maturity of 1 February 2022.
The key terms of the new debt facilities are:
Term Loan Facility
-- Facility of up to US$110 million
-- Availability for a period of 24 months after signing
-- Final maturity date 63 months after signing
-- Margin of 5.40% + LIBOR per annum
-- Repayment in seven equal semi-annual instalments beginning 27 months
after signing
Revolving Credit Facility
-- Facility of US$40 million
-- Availability for a period of 35 months after signing
-- Final maturity date 36 months after signing, extendable by up to 24
months at lender discretion
-- Margin of 5.00% + LIBOR per annum
In addition, the facilities accommodate the later inclusion of a Mine
Closure Guarantee Facility of up to US$40 million (increasing from US$3
million to a maximum of US$40 million over five years), which will share
the security package with the Term Loan Facility and Revolving Credit
Facility on a pro rata and pari passu basis.
This press release contains inside information as defined in article
7(1) of the Market Abuse Regulation.
For further information, please contact:
Kenmare Resources plc
Jeremy Dibb / Katharine Sutton
Investor Relations
Tel: +353 1 671 0411
Mob: + 353 87 943 0367 / + 353 87 663 0875
Murray (PR advisor)
Joe Heron
Tel: +353 1 498 0300
Mob: +353 87 690 9735
About Kenmare Resources
Kenmare Resources plc is one of the world's largest producers of mineral
sands products. Listed on the London Stock Exchange and the Euronext
Dublin, Kenmare operates the Moma Titanium Minerals Mine in Mozambique.
Moma's production accounts for approximately 7% of global titanium
feedstocks and the Company supplies to customers operating in more than
15 countries. Kenmare produces raw materials that are ultimately
consumed in everyday "quality-of life" items such as paints, plastics
and ceramic tiles.
(END) Dow Jones Newswires
December 11, 2019 02:00 ET (07:00 GMT)
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