Base Resources LTD (LON:BSE)(ASX:BSE) will repay the outstanding balance of the US$215 million debt incurred during the construction of its Kwale mineral sands project in Kenya within the next ten days.
The facility will be repaid from a combination of cash reserves and the utilisation of an existing revolving credit facility (RCF), following a concurrent RCF increase from US$30 mln to US$75 mln.
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Early retirement of the project debt facility provides the company with additional funding flexibility and reduced debt servicing costs.
The increased revolving facility will incur interest at LIBOR plus a margin of 4.63%, a significant reduction on the original 6.2%, and the 6.3% coupon that the facility incurred.
What’s more, as the parent company, Base Resources will no longer be the borrower. Rather, the RCF is now held by Base Titanium LTD, the owner of Kwale.
These changes were made to ensure maximum flexibility for the proposed development funding of the Toliara project.
Following repayment of the project debt facility, the outstanding balance of the revolving credit facility will be around US$49mln and the group’s net debt will be around US$33mln.