RESOURCE Generation (Resgen) has extended the financial close for funding of its Boikarabelo thermal coal mine to the end of August partly owing to the volatility of the rand among a bundle of other complexities.
The company said in an announcement to the Australian Stock Exchange this morning that closure of a number of conditions was proving complicated.
Funding arrangements for the mine, which have been in the works for five years, include a senior facility and three mezzanine facilities with banks, an equity contribution as well as a common terms agreement, and security package agreements of several stripes.
Of the loan package, R2.34bn will be senior debt towards which South Africa’s Public Investment Corporation (PIC) and the Industrial Development Corporation (IDC) will provide R950m and R540m respectively. Noble Resources will provide the balancing R850m as well as a further R750m as part of its commitment to R1.63bn in mezzanine debt. The PIC and IDC will provide R550m and R360m respectively in the mezzanine loan funding.
In terms of equity loans, the PIC and the IDC will provide R100m worth each with Noble Resources providing R30m.
Two outstanding issues are meeting conditions precedent on a R700m debt and equity deal with Harith General Partners, an infrastructure funding agency and $120m in “yellow machinery” financing which is being undertaken by the contractor for Boikarabelo.
Resgen also said that owing to delays in securing the project funding, and the recent devaluation of the rand, it was “considering initiatives to reduce the capital spend back to the currently agreed funding envelope of R4.2bn”.
“On the basis of the updated funding calendar the revised target for financial close is now the end of August 2020,” it said.
Resgen had requested a trading halt earlier this week ahead of the announcement.