Sentula raises R740m senior debt facility

[] — Sentula Mining announced on Monday that it has received final credit approval for a facility in the amount of R740m from a consortium of financial institutions to refinance the group’s existing senior debt facility and provide liquidity to the group.

The consortium comprises Standard Bank of South Africa Limited (SBSA), The Hong Kong and Shanghai Banking Corporation Limited (Johannesburg Branch) and Sanlam Capital Markets Limited.

SBSA has been mandated to advise and arrange the refinance. This refinance will provide Sentula with immediate capacity of R140m for new capital equipment. It will provide the group with refurbishment funding for the existing fleet and idle equipment of R120m over a six month period via a capital moratorium. The structure will also allow for further drawdown’s to finance new capital equipment over a four year period provided the aggregate debt within Sentula does not exceed R800m.

“Sentula intends to have the Facility implemented by early February 2011. The Facility’s availability is subject to conclusion of final documentation and fulfillment of conditions applicable to a facility of this nature,” the group said.

The salient features of the Facility are as follows:

1. a reduced funding rate;

2. a capital moratorium for two quarters; and

3. a four year fully amortising repayment profile.

Robin Berry, CEO of Sentula commented: “We are encouraged by the support from this consortium of credible financial institutions who have clearly demonstrated their commitment to Sentula. The refinancing structure creates more cash flow headroom, enables management to focus on operational issues and provides the Group with the requisite capital to reinvest in its fleet for sustainable growth into the future.

“Whilst we are cognisant of consequences of over-gearing given the Group’s peak debt level of R1.9bn in 2008 financial year, we believe that the peak debt level of R800m under the new facility is conservative and appropriate in current trading conditions.”