Kaz Minerals Shores Up Financing With DBK and ING

KAZ Minerals Approves USD1.2 Billion Kazakh Copper Expansion

KAZ Minerals announced on Tuesday that it has reached agreement on a new $300m credit facility with the Development Bank of Kazakhstan, which is scheduled to be signed on 14 December.

The FTSE 250 company said the DBK facility will finance the completion of the Aktogay project which began commissioning of its main sulphide concentrator on 6 December.

It said the facility is expected to be fully drawn before year-end and extends for a term of 8.5 years until final maturity in June 2025.

The loan is repayable in instalments with the first repayment due in June 2018, followed by semi-annual repayments in May and November of each year from 2019 until 2024 and a final repayment in June 2025.

KAZ’s board said the facility bears an interest rate of US dollar LIBOR +4.50% and contains a financial covenant which is the same as the group’s loan facilities with the China Development Bank, based on a ratio of total liabilities to total assets, with adjustments to mitigate the translation impact of movements in the US dollar-tenge exchange rate.

At the same time, the group also announced that an increased commitment by ING Bank in the pre-export finance facility has been agreed for an additional $50m under the accordion feature.

The additional commitment is expected to be drawn before the year-end.

KAZ said the total amount outstanding under the PXF as at 31 December, including the additional drawing, was expected to be approximately $283m.

As previously announced, the group intended to resume discussions with the PXF bank syndicate over a longer-term refinancing of the facility, after release of its 2016 financial statements.

Following the previously announced waiver obtained from the PXF lenders, KAZ said it has also received a waiver from Caterpillar Financial Services in relation to testing of the net debt-to-EBITDA covenant on 31 December under the $50m CAT facility.

“We are pleased to have secured a new, long-term facility of $300m from the Development Bank of Kazakhstan and to have increased ING Bank’s participation in the PXF facility by $50m, ahead of a planned refinancing in the first half of 2017,” said KAZ chief financial officer Andrew Southam.

“These transactions demonstrate the group’s ability to access diversified sources of finance and the strong support KAZ Minerals enjoys from its lenders.”