Kenmare secures $150m in new debt facilities
LSE-listed Kenmare Resources has signed debt facilities with Absa Bank, the Emerging Africa Infrastructure Fund, Nedbank, Rand Merchant Bank and Standard Bank.
The new debt facilities comprise a $110-million term loan facility and a $40-million revolving credit facility, which will be used in part to repay in full the existing senior and subordinated project loans, of which $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 $40-million.
FD Tony McCluskey on Wednesday said the new facilities would support the continued growth of the business, as well as extend the maturity profile of Kenmare’s 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,” he commented.
Kenmare’s planned increase in production volumes by more than 20% from 2021 will enable the company to expand its product margins and position it in the first quartile of the industry revenue cost curve, as well as to deliver increased cash flow 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 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.
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