6th Oct 2014 07:52
LONDON (Alliance News) - Base Resources Ltd Monday said it had got credit approval from all its lenders for the rescheduling of its USD215 million Kwale project debt facility, a move that reflects the delayed start of sales from the project.
When the company signed the debt facility back in 2011, it had expected to start sales from the Kwale mineral sands project in Kenya in October 2013, but sales actually started in February of this year.
Under the restructuring, all principle repayments and funding of the debt service reserve account will be deferred by six months, and there is some re-profiling to suit future cash flows. The first principle repayment will be deferred to June 2015, from December 2014, and total debt repayments for the 2015 financial year will fall to USD11.0 million, from USD45.9 million under the original deal.
Base Resources has had to pay for the restructuring. It has been charged a rescheduling fee of USD1.6 million, or 0.75% of the USD215 million debt facility, of which USD1.07 million is due within 30 days of the refinancing documents being executed and the rest on the earliest date of June 30, 2015 or within 30 days of contributing any required liquidity injection.
The applicable margin has also been increased by 0.6% a year until the liquidity injection has been satisfied, dropping to a 0.2% increase afterwards.
Base has committed to contribute up to USD15 million in additional liquidity by June 30, 2015 if required by any of the lenders. The injection can be subordinated debt on terms satisfactory to all lenders, an equity injection or a combination of both.
Base Resources has also agreed to increase the portion of the surplus cash sweep distributed to lenders at each repayment date to 50% until the total cumulative cash sweep reaches USD30 million, at which time the lender's portion returns to 35%. The lender's portion of the cash sweep is applied to accelerate repayment of the debt facility.
"The finalisation of the restructure is subject to the agreement and execution of final documentation, which is expected to be concluded over the next two months,2 the company said in a statement. "The implementation of the debt facility restructure puts Base in a sound position to complete the ramp-up and optimisation of the Kwale Project," the company said in a statement.
Its shares were down 3.1% at 15.50 pence on AIM in London early Monday.
By Steve McGrath; [email protected]; @stevemcgrath1
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