PT Inco gets $300m loan to finance hydro power project

IDX-listed South Sulawesi nickel miner PT International Nickel Indonesia Tbk announced Tuesday that on November 30, 2009 it has executed a Senior Export Facility Agreement for a loan facility in the amount of up to US$300 million with the Bank of Tokyo-Mitsubishi UFJ, Ltd. (as lender and mandated lead arranger) and Mizuho Corporate Bank, Ltd., (as lender, mandated lead arranger and facility agent), Vale S.A., as guarantor and Union Bank., N.A., as collateral agent.

Vale, the sole, indirect shareholder of PT Inco?s major shareholder, Vale Inco Limited, will guarantee the obligations of the Company under the Senior Export Facility Agreement.

The Export Facility is intended to be used to finance the hydro power project at the Larona River in the Karebbe area of South Sulawesi and will be supported by Nippon Export and Investment Insurance (NEXI).

In light of its improved financial performance and improved financial market conditions, the company decided not to execute the short-term revolving credit facility agreement with Vale International which was approved by the shareholders of the Company in April 2009. As a result, the company decided to take advantage of available attractive third party long-term finding for the Karebbe project in the form of the Export Facility, it said.

The Karebbe project will increase PT Inco?s hydro power generation by 33%, adding 90 megawatts to the current capacity, and is expected to be completed in 2011. The project is part of the efforts to produce permanent downward shifts in our cost structure, as it will replace high-cost thermal power generation in an energy intensive operation.(alex)