COAL MINER TERRACOM FIRES UP A$63 MILLION RESTRUCTURING PLAN

The company, which has two operating mines in Queensland and Mongolia, is launching a fully underwritten entitlement offer priced at 58c per share to raise an initial A$35 million.

TerraCom has also locked in a US$20m convertible bond deal with shareholder and investment manager OCP Asia.

Both efforts will see TerraCom’s interest costs eventually reduced by around $16 million every year.

Petra Capital is acting as lead manager, bookrunner and underwriter for the entitlement offer, which is also sub-underwritten by existing shareholders Bonython Coal No 1 and Noble Resources International, and a third party, Mistlake.

“The funds raised will significantly reduce the company’s cost of debt and provide vital leverage in the final negotiation of refinancing existing debt,” chairman Wal King said in a statement.

“It will provide the company with expansion and business development opportunities with its new restructured balance sheet … as well as providing the opportunity for the board in due course to deliver on its short-term goal of paying a maiden dividend to shareholders,” he noted.

The company recently upgraded the marketable reserves at its Blair Athol thermal coal mine in the Bowen Basin of Queensland, which added three years to the operation’s productive life.

TerraCom acquired Blair Athol in 2016 from Rio Tinto for only A$1 (about 70 US cents at today’s rates), at a time when coal prices were hitting historic lows and top miners couldn’t wait to offload their coal mines.

The company, which reopened the mine the following year, expects Blair Athol to churn out 3 million tonnes of coal a year over an eight-year mine life.

Source:http://www.mining.com/coal-miner-terracom-fires-a63-million-restructuring-plan/