Straits Asia signs $380 million debt financing

Singapore Exchange-listed coal mining group Straits Asia Resources Limited has entered into a five year financing facility worth US$380 million with a group of banks.

The facility is fully committed for five years and comprises of a term loan facility of $250 million, a revolving working capital facility of $50 million and a Letter of Credit/bank guarantee facility of $80 million, the company said on Monday.

The facility will be used to refinance an existing $255 million debt, provide additional working capital and funds for Straits Asia?s planned expansion of its coal production, it said.

?The completion of this facility provides a strong financial foundation for Straits Asia to unlock significant value for its shareholders through the growth of its Sebuku and Jembayan coal operations,? it said.

The term loan requires no repayments for a period of three years. Thereafter Straits Asia is to repay installments of US$40 million in six monthly intervals after the date of first utilization.

The balance is to be repaid upon maturity in January 2015.

The group of banks forming the loan facility are Siam Commercial Bank, Krung Thai Bank, Bangkok Bank and Standard Chartered Bank.

Straits is currently producing coal from its two producing mines namely PT Bahari Cakrawala Sebuku in South Kalimantan and PT Jembayan Muara Bara in East Kalimantan. Straits plans to produce 12 million tonnes of coal from both mines next year, including 3MT from its Sebuku mine. (denny)