Salim injects $30m lifeline funds to Atlantic?s vanadium project
Monday, March 10 2014 - 05:28 AM WIB
Indonesian billionaire Anthony Salim?s investment vehicle Droxford International Ltd has signed a new funding facility of US$29.7 million with Midwest Vanadium Pty Ltd (MPVL), a wholly-owned subsidiary of ASX-listed Atlantic Ltd. Droxford is Atlantic?s largest shareholder.
Atlantic said in a statement Monday that in addition to the new funding facility, MVPL has agreed a standstill arrangement ? providing forbearance and support ? with a majority of the holders of MVPL?s senior secured notes (Notes Group).
As reported earlier, the lifeline facility should help Atlantic salvage MVPL from bankruptcy following a fire incident at its plant in the Windimura Vanadium project, one of the largest in the world, in Western Australia.
The Monday statement added that Atlantic expects to receive the balance of the $16.7 million first progress payment on its insurance claim relating to the fire in MVPL?s beneficiation plant at Windimurra in the next few business days. As announced previously, the company believes the combined material damage and business interruption components of its insurance claim could be in the order of $100 million.
Atlantic said that the Droxford funding facility, the forbearance and support agreement and the insurance claim progress payment would provide ?a sound funding basis to take the company?s Windimurra project forward during the rebuild of the beneficiation plant; and flexibility to negotiate a longer term restructure of the company.
Elsewhere, the company provides the following explanation in the statement
The $29.7 million Droxford funding facility is new secured debt with a coupon of 17 percent per annum, maturing on 15 August 2014.
This facility will be secured pari passu with MVPL?s senior secured notes, subject to certain technical indenture and related document amendments to allow the new funding facility to be secured against the assets of MVPL.
In particular, among other conditions precedent, draw down of the facility is subject to a consent solicitation process among MVPL?s senior secured notes to implement the proposed indenture and related document amendments.
The consent process will commence shortly and is expected to be completed within 2-3 weeks.
Under the new funding facility, Droxford will also become a new beneficiary under the security trust deed governing the security currently held over all of the assets of MVPL by the senior secured notes. This will provide pari passu security for the new facility.
Editing by Reiner Simanjuntak