Sumatra obtains $45m finance facility for Tembang gold project
Friday, October 10 2014 - 01:54 AM WIB
ASX-listed Sumatra Copper & Gold plc said Friday that its wholly owned Indonesian subsidiary PT Dwinad Nusa Sejahtera has achieved credit approval with lead arrangers Nomura Singapore Limited and Indonesia Exim Bank for a senior secured debt facility of up to US$45 million to fund the commercial development of its Tembang gold project, located in southern Sumatra.
The facility will have a three-year term, Sumatra Copper & Gold said in a statement.
The key terms of the facility are as follows:
- Up to US$45 million Senior Secured Term Debt Facility.
- Hedging agreements to be entered into between Nomura and the company for gold hedge after drawdown.
- Interest rate of 7.5 percent increasing to 10 percent after 18 months with a redemption premium at the end of the loan period.
- Up to 250,597,351 warrants each convertible into one CHESS Depositary Interest (CDI) in the company. The exercise price of each warrant will be A$0.057 and the term of the warrants will be 3 years from the drawdown date. The issue of the warrants will be subject to approval of the shareholders of the company (shareholders meeting scheduled for October 27) and provision of the loan under the facility. If the warrants are not exercised during the term of the warrants, the company will be obliged to pay warrant holders up to US$4.05 million in cash or shares for the percentage of the warrants, which have not been exercised, which can be settled through the issue of CDIs in the company.
- The facility will be drawn down in a lump sum. As much as 85 percent of cash generated from the Tembang gold project will be utilized for payment of the facility each quarter and the balance of unpaid loan amount under the facility is due in a bullet repayment at the end of the 3-year term. Interest will be paid quarterly with a redemption premium at the end of the loan period.
Drawdown under the Facility is subject to shareholder approval for the issue of the warrants and registration of security. The facility is subject to completion of documentation.
The company is required to raise US$5 million in equity within six months of drawdown.
The company anticipates completion of the Facility during October 2014 with construction expected to restart during October 2014, it said in the statement.
Editing by Reiner Simanjuntak