Kenmare Resources Kenmare Resources : Announcement Of Plans For An Investment By State General Reserve Fund (SGRF), A Further...
December 07 2015 - 1:00AM
UK Regulatory
TIDMKMR
Kenmare Resources plc ("Kenmare" or "the Company")
7 December 2015
Announcement of plans for an investment by State General Reserve Fund
(SGRF), a further capital raising, and balance sheet restructuring
The Board of Kenmare today announces that it proposes to pursue a
capital raising and debt restructuring to materially deleverage the
balance sheet of the Company to provide a sustainable platform for
future operations, with an enhanced working capital position. Subject to
agreement with lenders, the plan is expected to result in gross
outstanding debt being substantially reduced and the satisfaction of the
requirement of lenders in relation to a material deleveraging
transaction.
The capital raising is expected to be conducted by means of a firm
placing and open offer. It is intended that there will be an opportunity
for existing shareholders to subscribe in the open offer on the same
terms as under the firm placing, failing which shares not subscribed for
will, it is anticipated, be issued to lenders as a partial equitisation
of the outstanding debt.
SGRF, a sovereign wealth fund of the Sultanate of Oman, has approved in
principle an investment of US$100 million in the firm placing via one of
its subsidiaries, subject to and conditional upon, inter alia, agreement
of a subscription agreement, agreement of arrangements with the Group's
project lenders on the Group's capital structure, procurement of
commitments from other shareholders in respect of an additional minimum
US$75 million capital, necessary Kenmare shareholder approvals, and
finalisation of a prospectus.
Following the withdrawal of the Iluka approach separately announced
today, and the related lifting of the restrictions on the Company which
applied during the offer period, the Company is seeking to engage in
negotiations with the lenders and key shareholders in relation to the
terms of the capital raising. The process of concluding these
negotiations and finalising related documentation is expected to take a
number of weeks. The Company remains in discussions with lenders in
respect of the required waivers to the April 2015 Amendment in the
context of planned further disbursements of the Super Senior facility.
Moma is a world-class asset that encompasses a large, long life ore
body. Total invested capital exceeds US$1.2 billion, with the mine
producing more than 7% of global TiO2 feedstock supply - being the
largest merchant producer of ilmenite globally. During 2015, Kenmare has
made material reductions to the sustainable costs of production in
response to the decline in market prices, while heavy mineral
concentrate and ilmenite achieved production records in Q3 2015.
Subject to agreeing a sustainable capital structure with lenders, the
Board believes Kenmare's business will be well supported during the
current low mineral sands pricing environment and will be well
positioned for all stakeholders to benefit from the expected recovery.
There remain a number of material matters that need to be agreed to
enable Kenmare to deliver the planned capital raising and there can be
no certainty at this time that they will be achieved. Kenmare welcomes
the indicated support from SGRF and appreciates the support of key
shareholders. Initial discussions between the lenders and Kenmare have
taken place and a term sheet has been shared with the lenders. Subject
to the support and co-operation of lenders and key shareholders, and
with the indicated support from SGRF, the Board of Kenmare looks forward
to progressing the capital raising. Furthermore, the Board remains
confident of the medium and long term fundamentals of the mineral sands
industry.
Further announcements will be made in due course. 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 and Investor Relations Manager
Tel: +353 1 671 0411
Mob: + 353 87 943 0367
Murray Consultants
Joe Heron
Tel: +353 1 498 0300
Mob: +353 87 690 9735
Buchanan
Bobby Morse / Anna Michniewicz
Tel: +44 207 466 5000
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#1971648
http://www.kenmareresources.com/
(END) Dow Jones Newswires
December 07, 2015 02:00 ET (07:00 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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