- Stanmore Coal (SMR) has formalised a loan facility agreement with Golden Energy and Resources (GEAR), worth roughly A$56.7 million
- The company’s subsidiary, Stanmore IP Coal, is working to satisfy the conditions to make the facility available for drawdown
- Stanmore Coal will use the available funds to refinance existing debt, fund capital expenditure, and provide working capital
- The GEAR Facility will mature on June 30, 2022, with no penalty for early repayment
- Stanmore Coal closed 1.42 per cent higher to trade for 71.5 cents per share
Stanmore Coal (SMR) has formalised a loan facility agreement with Golden Energy and Resources (GEAR), worth roughly A$56.7 million.
In June of this year, the company entered a non-binding term sheet for such a facility with GEAR. This decision came shortly after Stanmore received notification that Taurus Mining Finance had cancelled two of its facilities with the company.
Since the proposed GEAR Facility had similar terms to those offered by Taurus, it represented the best option for alternative financing.
Stanmore Coal has now formally entered into a secure facility agreement with GEAR, for a maximum of US$40 million (approximately A$56.7 million). The company’s subsidiary, Stanmore IP Coal will act as the borrower, while Stanmore and its other subsidiaries will act as guarantors.
Stanmore IP Coal is currently working to satisfy the conditions which will make the facility available for drawdown. Once accessible, the funds will be used for refinancing the company’s existing debt, capital expenditure, working capital, general corporate purposes.
The GEAR Facility will have an upfront fee of two per cent, and an eight per cent per annum interest rate of any funds drawn. It will also have a two per cent per annum interest rate on undrawn funds.
The GEAR Facility will mature on June 30, 2022, with no penalty for early repayment. Stanmore Coal fully intends to repay any advanced funds and applicable interest by the maturity date.
In related news, the company has agreed to an extension on payment terms, with a material supplier. In order to secure the payments, the supplier will be granted security over all of the assets of Stanmore IP Coal and other company subsidiaries.
The supplier will also be granted the shares which Stanmore Coal holds in Stanmore Bowen Coal, as part of this arrangement.
Stanmore Coal closed 1.42 per cent higher to trade for 71.5 cents per share.