6th May 2016 11:12
LONDON (Alliance News) - China Nonferrous Gold Ltd said on Friday it has signed a deal with an associate of its major shareholder China Nonferrous Metals International Mining Co Ltd for a loan facility of USD120.0 million, to refinance its existing loan facility.
CNMC International Capitals Co Ltd agreed the loan facility with China Nonferrous Gold, and is an associate of China Nonferrous Metals International Mining, which owns 38.36% of China Nonferrous Gold.
China Nonferrous Gold said it will use the funds to refinance its loan facility with Industrial and Commercial Bank of China (Macau) Ltd, under which USD115.0 million is currently drawn, as well as for working capital.
The new loan is repayable on 31 December, 2018 and includes an annual fixed interest rate of 4.0% on the amount drawn down, payable half yearly in arrears. There is no penalty for pre-payment, China Nonferrous Gold added, but said in the event of default, an interest rate of 6.0% per annum will be applied on any overdue amount from the date on which it is due until the date on which it is repaid.
China Nonferrous Gold said the loan is governed by the law of China and secured by a pledge granted by the company to CNMC over its wholly owned subsidiary Kryso Resources Ltd.
As CNMC is an associate of China Nonferrous Mining the transaction is deemed to be a related party transaction. China Nonferrous Gold's board of directors, having consulted with China Nonferrous Gold's nominated advisor Investec Bank PLC have found the terms of the CNMC loan to be "fair and reasonable insofar as the shareholders of China Nonferrous Gold are concerned".
Shares in China Nonferrous Gold were down 2.3% at 31.50 pence on Friday afternoon.
By Hannah Boland; [email protected]; @Hannaheboland
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