Kenmare Resources New Debt Facilities

 
TIDMKMR 
 
 
   Kenmare Resources plc ("Kenmare" or "the Company") 
 
   11 December 2019 
 
   New debt facilities 
 
   Kenmare Resources plc (LSE:KMR, ISE:KMR), one of the leading global 
producers of titanium minerals and zircon, which operates the Moma 
Titanium Minerals Mine in northern Mozambique, is pleased to announce 
the signing of debt facilities with Absa Bank Limited (acting through 
its Corporate and Investment Banking Division) ("Absa"), The Emerging 
Africa Infrastructure Fund (a PIDG Company) ("EAIF"), Nedbank Limited 
(acting through its Nedbank Corporate and Investment Banking division) 
("Nedbank"), Rand Merchant Bank and Standard Bank Group ("Standard 
Bank"). Rothschild & Co. acted as financial adviser to the Company on 
the transaction. 
 
   The new debt facilities comprise a US$110 million Term Loan Facility and 
a US$40 million Revolving Credit Facility. They will be used in part to 
repay in full the existing Senior and Subordinated Project Loans, of 
which US$64 million is outstanding, and for working capital purposes. 
The new debt facilities also provide for a future Mine Closure Guarantee 
Facility of up to US$40 million, sharing in security. 
 
   Statement from Tony McCluskey, Finance Director: 
 
   "The new facilities will support the continued growth of our business as 
well as extending the maturity profile of our debt beyond the current 
short period of increased capital expenditure. It is also particularly 
pleasing to  replace the existing project loans with much more flexible 
corporate facilities, underlining the Company's progress into a leading 
global mineral sands producer. 
 
   Our planned increase in production volumes by more than 20% from 2021 
will enable us to expand our product margins and position us in the 
first quartile of the industry revenue to cost curve, as well as to 
deliver increased cashflow stability. The original debt facilities were 
provided on terms that supported the building of the Moma Mine. However, 
given the strength of core cash flows being generated by the Moma Mine, 
the facilities provided by the new lender group, which includes both new 
and existing lenders, provide additional financial flexibility and are 
more suitable for Kenmare's position as an established producer." 
 
   Overview 
 
 
   -- New debt facilities provided by existing lenders (Absa and EAIF) and new 
      lenders (Nedbank, Rand Merchant Bank and Standard Bank) 
 
   -- Proceeds of the initial drawdown will be used to prepay in full the 
      Company's existing US$64 million Project Loans, and to pay fees and costs 
      associated with the financing 
 
   -- The new facilities provide the Company with additional financial 
      flexibility as a result of the extended maturity profile and increased 
      liquidity 
 
   -- Key financial covenants: interest cover ratio of >4.00 times; net debt to 
      EBITDA of <2 times; Debt Service Cover Ratio of >1.2 times; and minimum 
      liquidity of US$15 million 
 
   -- Distribution covenants: net debt to EBITDA of <1.5 times; and minimum 
      liquidity of US$25 million 
 
   -- Availability of the new debt facilities is subject to the satisfaction of 
      customary conditions precedent, which will be completed as soon as 
      practical 
 
 
   The existing Project Loan facilities have an interest rate of 4.75% + 
LIBOR until 1 February 2020 and 5.5% + LIBOR thereafter until final 
maturity of 1 February 2022. 
 
   The key terms of the new debt facilities are: 
 
   Term Loan Facility 
 
 
   -- Facility of up to US$110 million 
 
   -- Availability for a period of 24 months after signing 
 
   -- Final maturity date 63 months after signing 
 
   -- Margin of 5.40% + LIBOR per annum 
 
   -- Repayment in seven equal semi-annual instalments beginning 27 months 
      after signing 
 
 
   Revolving Credit Facility 
 
 
   -- Facility of US$40 million 
 
   -- Availability for a period of 35 months after signing 
 
   -- Final maturity date 36 months after signing, extendable by up to 24 
      months at lender discretion 
 
   -- Margin of 5.00% + LIBOR per annum 
 
 
   In addition, the facilities accommodate the later inclusion of a Mine 
Closure Guarantee Facility of up to US$40 million (increasing from US$3 
million to a maximum of US$40 million over five years), which will share 
the security package with the Term Loan Facility and Revolving Credit 
Facility on a pro rata and pari passu basis. 
 
   This press release contains inside information as defined in article 
7(1) of the Market Abuse Regulation. 
 
   For further information, please contact: 
 
   Kenmare Resources plc 
 
   Jeremy Dibb / Katharine Sutton 
 
   Investor Relations 
 
   Tel: [phone] 
 
   Mob: + 353 87 943 0367 / + 353 87 663 0875 
 
   Murray (PR advisor) 
 
   Joe Heron 
 
   Tel: [phone] 
 
   Mob: [phone] 
 
   About Kenmare Resources 
 
   Kenmare Resources plc is one of the world's largest producers of mineral 
sands products. Listed on the London Stock Exchange and the Euronext 
Dublin, Kenmare operates the Moma Titanium Minerals Mine in Mozambique. 
Moma's production accounts for approximately 7% of global titanium 
feedstocks and the Company supplies to customers operating in more than 
15 countries. Kenmare produces raw materials that are ultimately 
consumed in everyday "quality-of life" items such as paints, plastics 
and ceramic tiles. 
 
 
 
 
 
 

(END) Dow Jones Newswires

December 11, 2019 02:00 ET (07:00 GMT)

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