JOHANNESBURG (miningweekly.com) – Aim-listed International Mining & Infrastructure Corporation (IMIC) has concluded a bond restructuring process at a cost of about $100 000, which IMIC chairperson Ethelbert Cooper said on Friday increased its cash flexibility over the next few years.
The restructuring, which reflected a rate of 5% a year of the nominal value of the bond, introduced a cash payment profile that was more appropriate in the current economic environment.
“In addition, this agreement demonstrates cooperation and ongoing support of the existing bondholders, as well as IMIC's ability to find solutions to allow efficient fund allocation to progress the development of our key assets,” Cooper advised.
The company, which was currently focused on unlocking the value of iron-ore in Africa, noted that it reached an agreement with existing bondholders to restructure its 8.125% unsecured bond instrument, with a drawable value of up to $50-million, of which $10-million was drawn down in October 2012.
The restructuring was expected to be of significant benefit to IMIC in the medium to long term, as it would help the company to manage its cash position effectively while continuing to develop its iron-ore projects in Cameroon.
The restructuring process also saw other amendments being made to the terms of the bond, including the maturity date of the bond being extended by five years from October 18, 2015 to October 18, 2020.
The difference between the reduced coupon rate of 5% and the previous coupon rate of 8.125% would be accrued and repaid at maturity, at 122.32% of current nominal value to cover the interest payments differential and accrual to maturity, representing $12.2-million, based on the current level of drawdown.
“The bondholders have agreed to these changes because of the confidence they have in the vision, drive and capacity of IMIC's chairperson, Ethelbert Cooper,” the company said in a statement.
The bondholders would be entitled to accelerated repayment if Cooper was no longer the nonexecutive chairperson of the company.
Under the new terms, the regular interest payments would substantially decrease from $812 500 to $500 000 a year, assuming no further amounts were drawn down, and payment of the yearly interest charges would change from semiannual to annual.
Under the newly agreed terms of the bond the interest payments would be made on October 18 each year until the bond maturity date. The first payment of $500 000 would be made this year and included $250 000 in respect of the period from October 18, 2014, to April 18.
The remaining bonds held by the company to date amounted to $87.7-million, with a total cash interest of about $8.1-million due this year, which included the restructured bond interest.