Highfield Resources Ltd Secures €320.6m Secured Senior Project Finance for Muga Development
Highfield Resources Ltd (ASX:HFR) has secured credit approval for €320.6m (~A$495.9m) in a senior secured project financing that will help fund the construction and development of its 100% owned Muga Potash project in Spain.
The company has received credit approvals from a syndicate of four international financial institutions acting as Mandated Lead Arrangers (MLA) including BNP Paribas SA, ING Bank NV, Natixis CIB and Société Générale (London branch).
The senior facilities will include two financing agreements:
- a €300 million Senior Debt Facility to finance the construction and development of the project.
- a €20.6 million cost overrun credit facility to be used, if necessary, for the construction and development of the project.
Due diligence leads to a 10-year term
MLAs carried out extensive due diligence before making their decision and included a group of consultants specializing in technical, social, environmental, marketing and legal areas.
The term of the Senior Debt Facility will be 10 years and the term of the Cost Overrun Debt Facility will be five years.
This credit approval complements Highfield’s disciplined cash preservation strategy, which sees it with a cash balance at the end of the third quarter of A$11.3 million.
The company is also making great progress in negotiations with strategic investors and on the €23.3 million equipment lease facility with Macquarie.
“We are delighted to announce the credit approval of €320.6 million of credit facilities from BNP Paribas, ING, Natixis CIB and Société Générale,” said Highfield CEO Ignacio Salazar.
“This milestone represents the conclusion of an intensive and thorough due diligence process which included site visits by MPs and independent experts carrying out environmental, social, technical, marketing and legal assessments of the project.
“With the completion of preliminary works around the mine gate, securing funding for the project was an essential step in advancing the construction of the project.”
Shares of HFR rose 12% to A$0.84 while the company’s market capitalization is around A$292.34 million.