30th Dec 2009 11:07
30 December 2009
KAZAKHMYS PLC ANNOUNCES $2.7 BILLION FINANCING PACKAGE FOR GROWTH PROJECTS
On 13 October 2009, Kazakhmys PLC ("Kazakhmys") announced that it was in discussions with China Development Bank Corporation ("CDB") and Joint Stock Company Sovereign Wealth Fund Samruk-Kazyna ("Samruk") regarding a major unsecured loan facility. Kazakhmys today announces that it has secured up to $2.7 billion of this loan for its growth projects.
In June 2009, Samruk agreed a $3 billion financing line with CDB, to be used for the development of infrastructure and resource projects in Kazakhstan. Following a Memorandum of Financial Cooperation, signed between Kazakhmys, Samruk and the CDB, up to $2.7 billion of this line has been allocated to Kazakhmys. On 30 December, Kazakhmys signed Facility Agreements with Samruk for $2.1 billion of the allocated funds (the "Transaction"), which will be available for the following projects:
$100 million to fund the development of the Bozymchak gold/copper project
The remaining $600 million is available for signing over the next 3 years and will be allocated to other growth projects once committed.
The funds are available for drawing anytime within a 3 year period and once drawn will pay interest semi-annually at a rate of USD LIBOR plus 4.8%. Each Facility has a final maturity of between 12 and 15 years from the date of first drawing with amortisation commencing three years following the date of the first drawdown.
The Transaction is subject to the approval of shareholders of Kazakhmys and a circular, providing details of the Transaction including terms and guarantees, will be sent to shareholders in due course.
Oleg Novachuk, said: "We are delighted to have reached an agreement with Samruk and the CDB that gives us flexible, long dated financing to deliver our major growth projects. The transaction demonstrates our strong regional relationships and ability to raise significant funding in a challenging global market environment. Bozymchak will now move into development, with first output in 2011, and the feasibility study for our major copper growth project at Boschekul will start in early 2010. Securing this funding is a major boost for copper production from Kazakhstan and will help to meet the growing demand of our customers in China."
For further information please contact:
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Kazakhmys PLC |
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John Smelt |
Head of Corporate Communications |
Tel: +44 20 7901 7882 Tel: +44 78 7964 2675 |
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Irene Burton |
Financial Analyst |
Tel: +44 20 7901 7814 |
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Zulfira Mukhamediyarov |
Senior Manager - Media |
Tel: +77 27 266 317 |
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Merlin |
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David Simonson |
Tel: +44 20 7726 8400 0r +44 1823 401048 |
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Tom Randell |
Tel: +44 20 7726 8400 |
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Leonid Fink |
Tel: +44 20 7726 8400 |
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Notes to Editors
Kazakhmys PLC is a leading international natural resources group, listed in the UK and Kazakhstan, with significant interests in copper, gold, zinc, silver, power generation and petroleum.
It is the largest copper producer in Kazakhstan and one of the top ten worldwide with 20 mines, 10 concentrators and 2 smelters. Kazakhmys copper operations are fully integrated from mining ore through to the production of finished copper cathode and rod. Total copper cathode produced in 2008 from own ore was 343 thousand tonnes. Production is backed by a captive power supply and significant rail infrastructure. Kazakhmys also owns MKM, an upstream copper products fabrication company in Germany, which produces a range of pre- and semi-finished copper and copper alloy products.
Kazakhmys Copper produces significant volumes of other metals, including zinc, silver and gold. In 2008, it produced 48 thousand tonnes of zinc metal and 137 thousand tonnes of zinc concentrate. Kazakhmys is the fourth largest silver producer in the world (17 million ounces produced in 2008).
Kazakhmys Gold, which acquired Eurasia Gold Inc in July 2007, includes substantial new development and exploration opportunities. The Group produced 179 thousand ounces of gold in 2008 and has measured and indicated resources of 2.3 million ounces.
Kazakhmys Power owns the coal fired Ekibastuz GRES-1 plant, the largest in Kazakhstan with a nameplate capacity of 4,000 MW. In addition, it owns the Maikuben open cast coal mine, supplying around 20% of the power plant's fuel requirements producing over 3.6 million tonnes of coal in 2008.
Kazakhmys Petroleum owns the East Akzhar exploration block, with an area of 602km², located on the eastern fringe of the Caspian depression.
The Group is part of the FTSE-100 index of companies listed on the London Stock Exchange and is also listed on the Kazakhstan Stock Exchange (KASE). It had revenues of $5.2 billion in 2008 with EBITDA of $2.0 billion. The Group employs some 67,000 people, principally in Kazakhstan. The Group's strategic aim is to diversify and participate in the development of the significant natural resource opportunities in Central Asia.
Loan Arrangements
CDB has signed agreements with Samruk pursuant to which it will lend $2.6 billion to Samruk and has committed to lend another $400 million to Samruk. Samruk has signed agreements with Kazakhmys Finance PLC pursuant to which it will lend on $2.1 billion of those funds. $300 million has been drawn and utilised by Samruk for its own purposes. Once committed, it is intended that the remaining $600 million will be lent by CDB to Samruk and lent on by Samruk to Kazakhmys Finance PLC. The funds are available for drawing anytime within a 3 year period and once drawn will pay interest semi-annually at USD LIBOR plus 4.8%. Each Facility has a final maturity of between 12 and 15 years from the date of first drawing with amortisation commencing three years following the date of the first drawdown.
Kazakhmys has provided a guarantee jointly with a Samruk related entity in favour of CDB for a maximum of $2.0 billion against the $3.0 billion financing line. The maximum guaranteed liability for Kazakhmys under the guarantee is $1.7 billion (plus 85% of any interest and other duly payable costs and expenses). The exposure under the guarantee at any point in time is dependent on the total amount drawn under the $3.0 billion financing line. Any payments made by Kazakhmys under the guarantee will be netted off against payments to be made by Kazakhmys Finance PLC under the loan agreements between it and Samruk. Kazakhmys has also provided a guarantee in respect of the full amount of the loans made and to be made from Samruk to Kazakhmys Finance PLC.
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