Kenmare Resources Kenmare Resources Plc : Debt Financing Update
August 01 2014 - 1:02AM
UK Regulatory
TIDMKMR
Kenmare Resources plc ("Kenmare" or "the Company")
1 August 2014
Debt Financing Update
Kenmare Resources (LSE: KMR, ISE: KMR), one of the leading producers of
titanium minerals, is pleased to announce that it has agreed an
amendment to the project financing terms for the Moma Mine in Mozambique,
as well as an extension to the corporate loan provided by Absa Bank
Limited ("Absa"), a member of Barclays.
The project financing amendment removes the requirement to make
scheduled principal payments of Senior Debt and payments of interest and
principal of Subordinated Debt falling due in August 2014, February 2015
and August 2015. Instead, project lenders will receive payments under a
cash sweep dependent on the level of cash generation at the mine.
Simultaneously, Kenmare has agreed with Absa an extension to Absa's
US$20 million corporate loan, which will now mature on 31 March 2016.
Managing Director Michael Carvill commented: "We are pleased to have
concluded this agreement with the project lenders and Absa which will
enable us to conserve cash and provide greater flexibility during the
current period of low product prices."
The principal amendments to the project financing are as follows:
-- Principal repayments of Senior Debt and principal repayments and interest
due in respect of Subordinated Debt that in each case fall due on the 1
August, 2014, 1 February, 2015 and 1 August, 2015 payment dates will now
be paid only to the extent the Kenmare group cash balance exceeds US$80
million in accordance with a cash sweep mechanism.
-- To the extent scheduled amounts are not paid on the due dates under this
cash sweep mechanism, the balances would then be payable on the earlier
of the next payment date (to the extent payable under the cash sweep) and
the Deferral Amount Payment Date.
-- The Deferral Amount Payment Date is the earlier of 31 December 2015 and
30 days after a change of control of Kenmare.
In addition, Absa has agreed that the repayment date for the US$20
million loan provided to Kenmare will be extended from the current date
of 31 March 2015 to 31 March 2016. The terms of the extension provide
that the loan is repayable upon a change of control of Kenmare.
In return for this increased flexibility, Kenmare and the Project
Companies have agreed, amongst other things, to provide information to
project lenders in greater detail and on a more frequent basis, and to
meet the costs of providing the lenders with legal and other
professional advisers. In addition, the Project Companies are required
to deliver a budget for 2015 to the lenders by 31 January 2015. This
budget must show the Project Companies meeting their debts as they fall
due and be approved by the lenders, acting reasonably, failing which an
Event of Default would ensue.
The Kenmare group has also agreed to the payment of fees as follows:
-- In addition to fees payable to providers of political and commercial risk
insurance, guarantees to certain of the project lenders and payment of
reimbursable expenses, work fees of US$300,000 will be payable to the
project lenders, half of which will be payable to Senior Lenders and half
to Subordinated Lenders.
-- An extension fee equivalent to 4% (US$800,000) of the principal amount
will be payable to Absa in relation to the Absa Facility. It is expected
that this fee will be settled through the issuance of warrants for
Kenmare shares, unless these cannot be issued for regulatory reasons. The
warrants will not be issued before 1 September, 2014 and will have an
exercise price equal to the market price at the time of issue. The
warrants will be exercisable for a period of seven years and will
otherwise be on substantially the same terms as the warrants issued on 16
October 2013 in connection with Kenmare's placing at that time.
Kenmare group cash balances amounted to $37.3 million and the aggregate
group debt was $349.6 million at the 30 June 2014.
Kenmare's Half-Yearly Report is scheduled for release on 27 August 2014.
For further information, please contact:
Kenmare Resources plc
Michael Carvill, Managing Director
Tel: +353 1 671 0411
Mob: + 353 87 674 0110
Tony McCluskey, Financial Director
Tel: +353 1 671 0411
Mob: + 353 87 674 0346
Jeremy Dibb, Corporate Development & Investor Relations Manager
Tel: +353 1 671 0411
Mob: +353 87 943 0367
Murray Consultants
Joe Heron / Jim Milton
Tel: +353 1 498 0300
Buchanan
Bobby Morse / Louise Mason / Gordon Poole
Tel: +44 207 466 5000
Note: Kenmare Moma Mining (Mauritius) Limited and Kenmare Moma
Processing (Mauritius) Limited are wholly owned subsidiaries of Kenmare
Resources plc and collectively referred to herein as "the Project
Companies". The "Kenmare group" includes Kenmare Resources plc and its
subsidiaries.
The Directors of Kenmare accept responsibility for the information
contained in this announcement. To the best of their knowledge and
belief (having taken all reasonable care to ensure that such is the
case), the information contained in this announcement is in accordance
with the facts and does not omit anything likely to affect the import of
such information.
This announcement is not intended to, and does not, constitute or form
part of any offer, invitation or the solicitation of an offer to
purchase, otherwise acquire, subscribe for, sell or otherwise dispose of,
any securities whether pursuant to this announcement or otherwise. The
distribution of this announcement in jurisdictions outside Ireland or
the United Kingdom may be restricted by law and therefore persons into
whose possession this announcement comes should inform themselves about,
and observe, such restrictions. Any failure to comply with the
restrictions may constitute a violation of the securities law of any
such jurisdiction.
This announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Kenmare Resources via Globenewswire
HUG#1845582
http://www.kenmareresources.com/
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