TerraCom has completed its debt restructuring after negotiations with its financiers over the past few weeks.
As a result of the negotiations, TerraCom has entered into a binding agreement to issues a five-year interest only bond with a face value of US$130 million (AUS$177.5 million). This covers all secured debt, providing the company with funding certainty over the five year period covered by the bond.
The issuance of the bond will have a “significant positive impact on the company’s free cash flow over the next five years”, it said, providing greater operational flexibility compared to previous debt facilities. All long-form documentation related to the bond needs to be agreed by mid-June with work already underway and achievable by the deadline, according to the company.
In addition, on completion of the bond documentation, AUS$149.8 million that was recorded as “current borrowings” in the 31 December half-year results will be moved to non-current liabilities, boosting the company’s’ capital position by AUS$149.8 million.
Debt holders have also agreed to waive US$21 million (AUS$28.8 million) in interest and deferral fees that had been accrued but not paid by the company.
Meanwhile, the company has secured additional funding of US$3.1 million to enable it to complete the new supply chain at its BNU metallurgical coal mine in Mongolia. This will enable the mine to recommence operations and ramp up production to 1.5 million tpy.
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/17052016/terracom-completes-debt-restructuring-2016-793/