Highfield Resources Ltd continues to progress a Senior Secured Project Finance Facility originally signed in December 2022 to advance the Muga Potash Project in Spain into development.
The company has requested amendments to the facility’s terms and waivers in the context of a binding agreement with Yankuang Energy Group Co., Ltd and the start of construction on the Muga Project.
In mid-January, HFR said it would receive a major injection of funding from Yankuang after the Australian Foreign Investment Review Board (FIRB) offered a statement of no objection to Yankuang Energy’s proposed investment in the company.
Yankuang proposes to subscribe for up to US$376 million worth of ordinary shares in Highfield at A$0.50 per share.
Highfield aims to raise US$220 million in equity capital from Yankuang and other strategic investors, with the funds to fully finance the Muga Phase 1 potash project and facilitate the acquisition of the Southey Potash Project in Saskatchewan, Canada, through the purchase of Yankuang’s subsidiary, Yancoal Canada Resources, for total consideration of US$286 million.
Read more: Highfield Resources welcomes US$376 million share subscription as FIRB green lights investment
Amendment requests
Key requests from HFR to the facility include:
- Extension of project milestones - Highfield is seeking adjustments to project completion timelines, repayment schedules and associated dates to align with updated construction and financing plans. Construction of the Muga Project is expected to commence in the first half of 2025.
- Repayment schedule updates - The company has requested revisions to repayment instalments and schedules under the facility to reflect the extended timelines.
- Change of control waivers - In light of the strategic investment transactions with Yankuang Energy Group, Highfield seeks a waiver for change of control provisions triggered under the facility agreement.
- Temporary waiver of commitment fee payments - Highfield has requested a temporary suspension of commitment fee payments until the completion of the Yankuang Energy agreement, with accrued fees to be settled upon completion.
Additionally, Highfield is working with its financial advisor, DBS Securities, to amend the bank syndicate composition to better align with the agreement.
The company believes these amendments and waivers will ensure the finance facility and syndicate composition are tailored to the evolving needs of the Muga Project.
Highfield is confident that the adjustments will support the project’s successful completion and align with its broader strategic objectives.