Kenmare a step closer to much-needed capital
Published 21/06/2016 | 02:30
Kenmare Resources is a step closer to securing a much needed capital injection after lenders agreed a plan to restructure the Irish miner's debt.
It has to raise $275m for the deal to take effect.
The Oman State General Reserve Fund has committed $100m, and Kenmare said discussions with new and existing shareholders have been positive, with three large shareholders committing $115m between them. Some of the company lenders have agreed to make up the balance if the company falls $40.8m or less short, via an equity stake.
The plan is designed to reduce Kenmare's debt from $392m to $100m, with $75m of capital set aside for working capital and other day-to-day expenses.
"With the finalisation of key transaction agreements as announced today, we look forward to further engagement with investors and the completion of the Capital Restructuring in the next few weeks," Kenmare managing director Michael Carvill said.
The company's shares had risen 20pc in London by lunchtime yesterday.
"Production and cost guidance for 2016 remains unchanged and the product market is already showing a long awaited improvement in prices, reversing four years of significant downward pressure," Mr Carvill said.
"With increased power stability at the [Moma Titanium Minerals Mine in Mozambique], a recapitalised balance sheet, a new strategic investor and a higher free float than would have existed with two strategic investors, we believe that the completion of the capital restructuring will leave Kenmare in a strong position in an industry with expectations of a growing supply deficiency."