Danakali, AFC in talks as equity funding conditions unlikely to be met by Nov 21
Although ASX- and LSE-listed potash producer Danakali has been working in “good faith” to satisfy the conditions precedent for the Africa Finance Corporation’s (AFC’s) second tranche equity funding of $28.5-million, the company’s board now considers it unlikely that the conditions precedent will be satisfied prior to the deadline of November 21.
Danakali is developing the Colluli project in the Danakil depression region of Eritrea.
Tranche 2 of the AFC’s equity funding, which was first announced on December 3, 2019, was in June deferred to enable for the stabilisation of market and global conditions. At the time, Danakali and AFC agreed to an extension to the deadline for completion of the tranche to on or before November 21.
The extension was to enable time for satisfaction of the remaining conditions precedent and was considered necessary in response to, besides other things, the constraints arising from global restrictions imposed as a result of the Covid-19 pandemic.
However, at this point in time, the miner reports that Tranche 2 will not complete in accordance with the terms of the subscription agreement.
Danakali notes that, as an international financial institution with a mandate to support infrastructure and industrial development in Africa, AFC’s support for the development of the Colluli project “remains firm”.
As Danakali’s largest shareholder and one of the two mandated lead arrangers and lenders under the Colluli project’s $200-million debt financing, AFC is in discussion with Danakali with a view to finding a funding structure suitable to both parties that will ensure the start of construction of the project as soon as possible.
AFC president and CEO Samaila Zubairu says the AFC’s mandate is to develop Africa and ensure more of the value of the continent’s resources benefit the continent’s people through the creation of jobs and opportunities along with improving living standards.
“AFC are fully committed to seeing Colluli developed as quickly and safely as possible and look forward to working with the key stakeholders, the Eritrean National Mining Corporation, Afreximbank and Danakali on this important objective and ensure the project is fully funded as soon as possible so production commences in 2022.”
Comments
The
content
you are trying to access is only available to subscribers.
If you are already a subscriber, you can Login Here.
If you are not a subscriber, you can subscribe now, by selecting one of the below options.
For more information or assistance, please contact us at subscriptions@creamermedia.co.za.
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation