JOHANNESBURG (miningweekly.com) – London-listed Kenmare Resources has amended the terms of the project financing for its Moma mine, in Mozambique, and negotiated an extension of the repayment date of its $20-million loan from Absa, allowing it to conserve cash and have greater flexibility during the current period of low commodity prices, Kenmare MD Michael Carvill said on Friday.
The terms of the Moma project financing had been amended to remove the requirement to make scheduled principal payments of senior debt, interest and subordinated debt in August 2014, February 2015 and August 2015.
Kenmare would now pay these amounts only to the extent that the Kenmare group cash balance exceeded $80-million, in accordance with a cash sweep mechanism, the company explained.
Simultaneously, Kenmare had also secured an extension to Absa’s $20-million corporate loan, which would now mature on March 31, 2016, as opposed to March 31, 2015.
The terms of the extension provide that the loan was repayable upon a change of control of Kenmare.
“In return for this increased flexibility, Kenmare and the project companies have agreed, among 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 January 31, 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,” Kenmare explained.
Kenmare’s group cash balances amounted to $37.3-million, while aggregate group debt was $349.6-million at June 30.
The company would release its half-yearly report on August 27.