Business
Indication of Significant Debt Financing Capacity
Indication of Significant Debt Financing Capacity.
About this update from Emmerson Plc
[{"type":"text","content":"\n \nRNS Number : 5986B Emmerson PLC 10 June 2019 \n\nEmmerson Plc / Ticker: EML / Index: LSE / Sector: Mining\n10 June 2019\nIndication of Significant Debt Financing Capacity to Support Development of Khemisset Potash Project\nEmmerson Plc (\"Emmerson\" or \"the Company\"), which is focused on developing the low cost, high margin Khemisset Potash Project (\"Khemisset\" or \"the Project\"), is pleased to announce it has received a formal indication of significant debt financing for Khemisset from a major European commercial bank. The indicative sizing shows debt capacity of up to US$230 million would be feasible assuming standard project finance terms and conditions. It is expected the syndicate will comprise of commercial banks and Export Credit Agencies.\nHighlights\n· Indication of potential project finance debt of up to US$230m for construction of the Project has resulted from ongoing discussions with major global commercial bank\n· Expected syndicate would consist of major commercial banks and Export Credit Agencies (\"ECAs\") \n· Debt sizing based on very conservative, bank case, pricing assumption of US$235/tonne (delivered to Brazil) Muriate of Potash price flat over the life of the project\no This price represents c. 35% discount to current spot prices\no Strong potential to increase debt capacity if customer floor prices above base case can be negotiated\n· Indicative terms in line with market norms for mine construction project finance including standard covenants, cash sweeps and security packages\n· Initial due diligence and financial modelling completed by major global commercial bank\n· Final debt sizing and terms subject to using conditions including the completion of satisfactory technical, legal and environmental due diligence and finalisation of offtake agreements.\n \nHayden Locke, CEO of Emmerson, commented: \"To be approached by a major commercial bank with an early indication of debt financing capacity of such significant size, despite using very low potash price assumptions, is a huge endorsement of the economic strength of the Project. \n\"The Scoping Study, which was delivered in November 2018, highlighted Khemisset's industry leading capital intensity, but also showed that,...