Fortescue Metals Group (ASX: FMG) will take a bite out of the most expensive debt on its balance sheet by redeeming A$140 million of Redeemable Preference Shares to reduce gearing levels.
Taking advantage of the buoyant iron ore markets to sell its high grade Pilbara product and generate high cash balances, this is a step, but unlikely to be the last by Fortescue to reduce overall borrowings.
The Preference Shares have a fixed coupon interest rate of 9%, will be redeemed in their entirety on Monday November 11, 2013, at the principal value plus any accrued unpaid interest.
The Preference Shares have some history and date back to September 30, 2008 and were part of the company’s original project financing structure.
The Pilbara miner has nearly completed a US$9.0 billion expansion to produce 155 million tonnes per annum, which has enabled the Company to begin debt repayments this year.
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