Sumatra Copper obtains VAT financing facility from UOB

By Romel S. gurky

ASX-listed Sumatra Copper & Gold plc announced Friday that its wholly-owned Indonesian subsidiary PT Dwinad Nusa Sejahtera (DNS) has executed a VAT Financing Facility with PT Bank UOB Indonesia.

The company said in a statement that under the VAT Facility, DNS will be advanced up to Rp 60 billion or its equivalent in US dollars (approximately US$4.6 million at an assumed exchange rate of Rp 13,011 per dollar). The VAT Facility provides a prepayment of value added tax claims lodged by DNS with the Indonesian tax authorities.

The key terms of the VAT Facility are:
? Availability Period of 6 months from the date of execution;
? Final maturity date 18 months after the availability period;
? Repayment upon receipt of the respective VAT refund payment from the Indonesian tax authorities or the maturity date of the VAT Facility, whichever is the earlier;
? 2% facility fee;
? Interest rate equal to LIBOR + up to 4% for US dollars or JIBOR + 5% for Indonesian Rupiah.

The VAT Facility is secured by way of corporate guarantee from the company, a pledge of DNS? VAT account to UOB and assignment of DNS? VAT claims and all proceeds from VAT refunds received from the Indonesian tax authorities to the order of UOB.

Sumatra Copper added its major shareholder, PT Provident Capital Indonesia, has provided a corporate guarantee for the VAT Facility. There is no security over company assets other than VAT receivables, it said.

?Initial drawdown of approximately US$2.0 - $2.5 million of the VAT Facility is expected within the next week. The funds are proposed to be applied to general working capital,? Sumatra Copper said.

Editing by Reiner Simanjuntak