Rikus Grobler | Oct 18, 2017 | 0
Paladin repays US$56.4 million loan
Paladin Energy recently announced a once-off US$81.4 million reduction in total debt to US$362 million through the key elements of a repayment and termination of the US$56.4 million Langer Heinrich Mine syndicated facility agreement and an additional repurchase of a principal amount of US$25 million of its outstanding US$237 million 6.00% Convertible Bonds due in 2017.
This is according to the CEO, Alexander Molyneux as announced on the Namibia Stock Exchange’s news service. The SENS announcement states that Paladin has resolved to repay the entire US$56.4 million remaining, drawn under the Langer Heinrich Mine Syndicated Facility and then to terminate the facility The process of providing notice to its lenders under the terms of the facility is under way.
According to the announcement cash expenditure for the termination is expected to be approximately US$57.1 million, which includes the principal outstanding plus accrued interest up to the date of termination. The Langer Heinrich Mine Syndicated Facility currently carries an interest rate of approximately 5.08%. Explaining the rationale behind the decision, Paladin said “Terminating the Langer Heinrich Syndicated Facility has a number of benefits for the company, including the release of US$28.2 million of cash which has been restricted and been held in a debt service reserve account in support of the LHM Syndicated Facility; the elimination of a relatively expensive and inflexible source of funding; and release of the security arrangements so that such security can be applied to the new working capital facility.”
Meanwhile the announcement said that the company has repurchased an additional US$25 million of the 2017 Convertible Bonds.