Straits Asia signs $230m debt financing deal to fund acquisition

Singapore Exchange-listed coal miner Straits Asia Resources Limited announced Thursday that it has signed a US$230 million 364-day bridge facility with Standard Chartered Bank and Sumitomo Mitsui Banking Corporation to part-finance its purchases of additional mine concession areas in Northern Sebuku Island and the Jembayan Coal Operation.

The Facility, which is fully underwritten by the Original Mandated Lead Arrangers, comprises a US$220 million bridge and a US$10 million bank guarantee or performance bond.

The Original Mandated Lead Arrangers have simultaneously launched sub-underwriting and general syndication, and expect primary syndication to be completed by early December.

The Jembayan Acquisition consists of the mining, exploration and offtake rights in an existing mining operation and mining concession in East Kalimantan. The consideration payable consists of US$275 million in cash and the issue of 75.09 million new Straits Asia shares to the vendors, representing approximately 6.9% of Straits Asia?s enlarged issued share capital.

The Northern Sebuku Acquisition consists of the mining, exploration and offtake rights for two coal mining concession areas on Sebuku Island in Indonesia. The consideration payable consists of a payment of US$25 million in cash. A contingent payment of approximately US$114 million is payable upon satisfaction of conditions precedent, which include, among others, obtaining the relevant Indonesian government approvals to re-classify certain areas within the mining concession and to commence mining activities within the area.

Straits Asia also completed a share placement on 4 October 2007, raising approximately US$102 million of fresh equity in the process.

Straits Asia and the Original Mandated Lead Arrangers will now proceed to satisfy all applicable conditions precedent to complete the Debt Financing, with financial close expected to occur around the end of 2007.

Macquarie Securities (Asia) Pte Limited is acting as financial advisor to Straits Asia on the transaction.

Straits Asia is a subsidiary of Australian miner Straits Resources Limited. (alex)