24th Sep 2018 08:55
LONDON (Alliance News) - Gold miner Petropavlovsk PLC said on Monday that IRC Ltd, in which it holds a 31% stake has agreed to a refinancing of its USD204 million project finance facility with Industrial & Commercial Bank of China Ltd.
IRC and Petropavlovsk were advised by a "leading Russian bank" that its credit committee has granted approval for a new USD240 million facility to be provided to IRC through its subsidiary LLC KS GOK.
The facility will be used to pay the Bank of China facility in full and repay to Petropavlovsk by December the rouble equivalent of USD30 million for the bridge loan advanced in June, as well as a guarantee fee of USD6 million.
Under the proposed arrangements, the full release of Petropavlovsk's obligations as a guarantor of IRC's borrowings will happen in stages, reducing the company's balance sheet exposure down to zero by the end of 2020.
The refinancing deal is subject to the execution of finance documentation, and Petropavlovsk shareholder approval, and is expected to be launched by November.
"One of the new board's key objectives is to achieve a solution to remove the company's guarantee of IRC's borrowings and we are therefore pleased to have made significant progress in this regard. The successful completion of the proposed transaction will see the company receive repayment of the bridging loan advanced by the company's previous board to IRC and reduce our balance sheet risk exposure at an important time in the company's development," said Chief Executive Officer Pavel Maslovskiy.
Shares in Petropavlovsk were up 3.2% at 6.50 pence on Monday.
Related Shares:
POG.L