Frontier Energy (ASX:FHE) has locked in its preferences for which banks should fund its WA-based Waroona solar play, the company announced on Wednesday.
This officially marks the company’s debt financing process moving into ‘Phase Two.’ Barrenjoey has been selected as a corporate advisor.
With preferred banks selected – not disclosed in today’s news from Frontier – thee company expects to have the fineprint worked out in the next “8 to 12 weeks” if due diligence goes ahead smoothly.
The company reported that after publishing its Waroona DFS earlier this year, it’s received strong interest from banks both down under and overseas.
The company is ultimately seeking a debt facility between $200M and $225M.The hunt for a strategic equity investor remains ongoing.
“We have now moved into the second phase of the debt financing process and will be working closely with shortlisted banks towards credit approved terms and complete due diligence requirements in a timely manner,” Frontier chief Adam Kiley said on Wednesday.
“Key to the initial phase of the debt financing process was confirmation of our major funding assumptions, which assumed gearing levels of between 65% to 70%, equating to between $200 million and $225 million.”
Frontier’s Waroona solar project is intended to provide electricity into WA’s power grid. The company noted last month record demand in the powerhouse state saw prices hit new levels – both an alluring prospect for Frontier, and a situation it can help ameliorate.
FHE shares closed on Tuesday at 35cps.