Pan African Resources PLC (AIM:PAF, OTCQX:PAFRY, JSE:PAN, OTCQX:PAFRF) has consolidated the term loan relating to the Elikhulu project with its existing revolving credit facility into a new revolving credit facility, which became effective on 25 November 2021.
The new facility is provided by Rand Merchant Bank and Nedbank, has a three-year term and bears interest at a reduced margin of 275 basis points over the applicable Johannesburg Interbank Average Rate (JIBAR), compared to the respective 380 and 330 basis points over JIBAR applicable to the term loan and previous revolving credit facility.
The available capacity on the facility reduces to 850mln rand and 700mln rand on 31 December 2022 and 31 December 2023, respectively, with a final maturity date of 30 June 2024.
The New RCF’s covenant compliance is measured semi-annually for a rolling 12-month period, as follows and includes stipulation that debt service cover ratio must be greater than 1.3 times, interest cover ratio must be greater than four times, net debt to equity ratio must be less than 1:1 and net debt to EBITDA must be less than 2:1.
“Even though the group expects to be materially debt-free during the next year, the new revolving credit facility provides the group with access to a flexible and cost effective facility over the next three years, should it be required for growth or contingency purposes,” said Pan African’s chief executive Cobus Loots.