Paladin negotiates new financing for Langer Heinrich
Australian mining company, Paladin Energy Ltd announced it has entered into agreements with its existing lenders to refinance the Langer Heinrich project finance facility. The facility was drawn down in conjunction with financial close of the Langer Heinrich minority sale.
Paladin Managing Director and CEO John Borshoff said: “Once again, Paladin has been able to refinance the facility in a tough uranium price environment while significantly reducing the security requirements and medium term principal repayments. Paladin continues to focus on ways to reduce the company´s overall debt levels and this represents another step in this process.”
Paladin has refinanced the existing US$110 million project finance facility and US$20 million working capital facility into a new US$70 million syndicated loan facility. Proceeds from the Langer Heinrich minority sale were utilised to prepay US$30.83 million of the existing facility, taking the outstanding balance to US$70 million.
This new facility will provide significant cash flow benefits and further strengthens Paladin´s financial position. The annual principal repayments will reduce by US$32.4 million over the first three and a half years of the facility, from US$18.33 million per annum to US$9.09 million per annum with the first repayment of US$4.55 million only due in December 2014.
The borrower of the new facility remains Paladin Finance (Pty) Ltd. The new facility is lighter on security with Langer Heinrich Mauritius Holdings Limited and Langer Heinrich Uranium (Pty) Ltd providing no guarantees or security over the project assets. The facility will also have a financial covenant holiday for the first four semesterly calculation periods starting 31 December 2014.
The new facility is provided by Nedbank Capital, a division of Nedbank Limited, Nedbank Namibia Limited, Standard Bank South Africa Limited and Standard Bank Namibia Limited. Both banks have been involved with Paladin since the first Langer Heinrich project finance facility was established in 2006.
Paladin announced on 17 January 2014 that it had entered into agreements with its lenders to refinance the Langer Heinrich Mine and the Kayelekera mine (Malawi) project finance facilities. Paladin said this new facility provides significant cash-flow benefits to both projects and puts Paladin in a much stronger financial position.