4th Jul 2016 07:00
LONDON (Alliance News) - Gemfields PLC Monday said it has secured four debt facilities worth a total of USD65.0 million after evaluating a number of proposals, stating the package secured is seen as the "best option" for the business.
The miner said the package includes a USD45.0 million facility for the company's ruby operations, which lie in Mozambique and are held by Montepuez Ruby Mining Lda, in which Gemfields owns a 75% stake.
That USD45.0 million facility is comprised of a USD15.0 million unsecured overdraft facility from Barclays Bank Mozambique, carrying an interest rate of 4.0% per year. Gemfields has issued a corporate guarantee for the facility secured by Montepuez Ruby Mining.
Another USD15.0 million overdraft facility has been secured from Banco Comercial E De Investimentos SA, which will last for 18 months and carry an interest rate of 3.75% per year. That facility is secured by a blank promissory note undertaken by Montepuez Ruby Mining and a corporate guarantee by Gemfields.
The other USD15.0 million has been secured by a finance leasing facility with Banco Comercial. The facility is renewable with an 18-month drawdown period, and the amounts drawn down will be repayable over a maximum of 48 months. The facility carries an interest rate of 3.75% per year and is also secured by a blank promissory note undertaken by Montepuez Ruby Mining and a corporate guarantee by Gemfields.
On top of those three facilities worth a total of USD45.0 million, Gemfields said another USD20.0 million financing facility has been secured from Macquarie Bank Ltd. It is a fixed term facility carrying an interest rate of 4.5% per year and is repayable in regular instalments over a 12-month period from the date of first drawdown of the loan.
The security for that loan comprises a floating charge over the jewellery and cut and polished gemstones of Faberge (UK) Ltd, one of the company's subsidiaries, and Gemfields itself.
Importantly, the loan from Macquarie Bank replaces the USD25.0 million debt facility that was secured in April 2015 that was being used for general corporate purposes.
The proceeds of the new financing facilities will be used to finance its capital expenditure requirements for the Montepuez ruby deposit in Mozambique and provide additional working capital.
By Joshua Warner; [email protected]; @JoshAlliance
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