Cockatoo negotiates A$37m cash release for Baralaba
PERTH (miningweekly.com) – ASX-listed Cockatoo Coal has reached an agreement with two of its major shareholders and its principal bank to release A$37-million of restricted cash as part of its funding plans for the Baralaba expansion project, in Queensland.
Cockatoo on Tuesday said that it had finalised agreements with Noble Group and SK Networks (SKN), as well as Australia and New Zealand Banking Group (ANZ) to have the cash released.
Under the arrangements, Noble and SKN would each procure a bank guarantee in favour of ANZ, as replacement security for guarantees supporting infrastructure entitlement, including a three-million-tonne-a-year take-or-pay agreement with the New Wiggins Island coal export terminal.
The arrangements would have a three-year term and guarantee fees would be charged at 12.5% a year, plus expenses.
In addition to the provision of the guarantees, Noble and SKN have agreed to an offtake of about 5.85-million tonnes from the Baralaba complex, which translated to about 390 000 t/y over a 15-year period.
Cockatoo MD Andrew Lawson pointed out that securing the offtake agreements satisfied a key condition of the A$255-million ANZ project funding facility for the Baralaba project.
“Cockatoo has successfully finalised the first stage of this funding strategy post the equity raise in the fourth quarter of last year, by negotiating with its two major shareholders a release of A$37-million of Cockatoo’s cash that has, until now, been held as security against various guarantees.”
“These are tough times for everyone in the coal industry, but with the ongoing support from our major shareholders, and from ANZ, Cockatoo management is confident that it can emerge with a robust and competitive 3.5-million-tonne-a-year expansion to take advantage of the expected upswing in coal demand and price,” Lawson added.
Cockatoo was expected to hit its 3.5-million-tonne-a-year production rate by 2015.
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