Highfield Resources Ltd is a step closer to forming a globally diversified potash company, having wrapped up binding agreements with Yankuang Energy Group Co Ltd, Beijing Energy International Co Ltd and Singapore Taizhong Global Development Pte Ltd.
Foreign Investment hurdle cleared
The companies have progressed key regulatory approvals required under the transaction, with Australia’s Foreign Investment Review Board clearing the interests to be acquired by Yankuang Energy and Beijing Energy International.
Additionally, no notice has been issued under the Investment Canada Act, satisfying the condition for acquiring Yancoal Canada Resources Co Ltd.
Regulatory review under Spanish foreign direct investment laws remains ongoing.
Highfield is also engaged in high-level discussions with the Spanish government to resolve administrative matters concerning the Goyo permit.
In parallel, the company has submitted formal amendments to its Senior Secured Project Finance Facility to waive certain provisions, including those relating to change of control.
As part of the restructure, Societe Generale, BNP Paribas and Natixis will exit the facility.
Highfield is working with its financial adviser DBS Securities, continuing lenders ING, HSBC and Caja Rural and potential new lenders to secure a revised syndicate aligned with the evolving requirements of the Muga Project and the company’s post-transaction shareholding.
An interim lease agreement with Macquarie Specialised Asset Services Ltd has been signed for four Komatsu shuttle cars valued at US$4.7 million, following the expiry of a €25 million lease facility.
Facility to be expanded
Highfield intends to extend and expand this facility once equity proceeds are received.
Under the cornerstone placement, Yankuang, BJEI and Taizhong have committed up to US$170 million.
Negotiations for the remaining US$50 million needed to complete the US$220 million raise are well advanced, with multiple investors under confidentiality agreements.
Cost control measures remain in place, including the implementation of a furlough scheme from March 1, reducing staff costs by 20% to 50%.