Kenmare defaults on debt but given time by lenders
Published 02/02/2016 | 02:30
Irish miner Kenmare Resources has defaulted on its debt.
Its shares plunged in London yesterday, losing almost a quarter of their value. But the company said it was being given time by lenders to find a solution.
Kenmare said it had presented a required deleveraging plan to lenders but that an agreement had not been reached by a deadline of January 31. The plan includes a $100m investment in the company by the State General Reserve Fund of Oman.
"While lenders are still considering this plan it has not been agreed by the deadline... resulting in an event of default," Kenmare told the market.
"The company continues to monitor and manage its liquidity position very carefully. In support, lenders agreed to defer payment of $2.3m fees... from 31 December 2015 to 29 February. In addition, Kenmare and lenders continue to discuss potential accommodations in relation to events of default (including relating to the deleveraging plan) and conditions to further disbursement of super senior debt and no event of default has been declared by lenders to date."
Kenmare also said that the amount of ore mined at its Moma mine in Mozambique fell by 19pc in 2015, as a result of flooding and power interruptions. But it said an investment in electricity infrastructure by the Mozambique state electricity company "has resulted in a step change in the quality and consistency of our power supply since coming on line in late December".
"Prices of ilmenite, our major product, have remained under pressure in Q4 2015. However, the recent closures of titanomagnetite mines in Russia and China and the reduction of feedstock inventories at Chinese ports are encouraging."