Owing to delays in satisfying certain conditions precedent to reaching financial close for first drawdown under the mine funding package for the construction of the Boikarabelo coal project, dual-listed Resource Generation (Resgen) has been trying to secure formal sign-off of the extension of the common terms agreement.
On December 5, 2019, Resgen announced that, along with its majority owned subsidiary, Ledjadja Coal, it had executed principal binding agreements for the funding of the construction of Boikarabelo.
The members of the lending syndicate comprised the Government Employees Pension Fund and the Unemployment Insurance Fund, the Industrial Development Corporation of South Africa (IDC) and Noble Resources International.
While seeking these formal sign offs, the company has now been advised by the IDC that, after completing a due diligence investigation for the purpose of the extension, a view has been formed that the market conditions under which Boikarabelo would operate have deteriorated materially.
Based on the findings, the IDC’s Special Credit Committee resolved that IDC should not grant an extension of the common terms agreement, notes Resgen.
Further, the IDC Special Credit Committee also decided to cancel all previously approved facilities under the mine funding package.
Resgen says it is seeking an urgent meeting with Noble to discuss this development.