Kenmare agrees $150m in new debt facilities

Titanium minerals and zircon producer Kenmare Resources announced the signing of debt facilities with Absa Bank, the Emerging Africa Infrastructure Fund, Nedbank, Rand Merchant Bank and Standard Bank Group on Wednesday, with Rothschild acting as its financial adviser.

The London-listed firm said the new debt facilities comprised a $110m term loan facility and a $40m revolving credit facility.

It said they would be used in part to repay in full the existing senior and subordinated project loans, of which $64m was outstanding, and for working capital purposes.

The new debt facilities also provided for a future mine closure guarantee facility of up to $40m, sharing in security.

“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,” said Kenmare’s finance director Tony McCluskey.

“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.”

McCluskey said the firm’s planned increase in production volumes by more than 20% from 2021 would enable it to expand its product margins and position it in the first quartile of the industry revenue to cost curve, as well as to deliver increased cash flow 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.”

At 1306 GMT, shares in Kenmare Resources were up 1.36% at 223p.