ZincOx Resources PLC Debt Restructuring for Korean Recycling Plant (8844I)
31 March 2015 - 5:00PM
UK Regulatory
TIDMZOX
RNS Number : 8844I
ZincOx Resources PLC
31 March 2015
ZincOx Resources plc
("ZincOx" or the "Company")
Debt Restructuring for Korean Recycling Plant
ZincOx is pleased to announce that it has reached agreement with
Korea Zinc Company Limited ("Korea Zinc") concerning a significant
restructuring of the Korea Recycling Plant's ("KRP") short dated
debt. ZincOx owns 100% of the KRP which is one of the world's
largest Electric Arc Furnace Dust ("EAFD") treatment facilities.
KRP has a nominal annual capacity of 200,000 tonnes of EAFD for the
production of about 75,000 tonnes of high quality zinc
concentrate.
KRP has been developed with the support of two loans from Korea
Zinc:
1. Offtake Loan - a long term loan of $37.8 million bearing
interest at 5% over LIBOR and repayable from 50% of free cashflow
with any balance being repayable in 2022.
2. Development Loan - a short term loan of $15.0 million bearing
interest at 15% and repayable as a single bullet in February 2016.
As part of these debt facilities, ZincOx agreed to sell all of its
zinc concentrate, at market prices, to Korea Zinc for ten
years.
The Company has today agreed with Korea Zinc on a restructuring
of the Development Loan. The Offtake Loan terms remain unaltered.
The Development Loan terms will now be as follows:
I. Accrued interest of $3.9 million will be added to the
principal amount of the Development Loan,
II. The interest rate will be reduced from 15% to 9.5%, and
III. The repayment of the new principal outstanding amount of
the Development Loan, $18.9 million, will be spread over six equal
payments of approximately $3.1 million to be made every six months
commencing in February 2016.
In consideration of this restructuring, ZincOx has agreed to
increase the zinc concentrate offtake contract to 1,050,000 tonnes,
from 840,000 tonnes, of which, to date, about 100,000 tonnes have
been delivered and which, based on nominal capacity, should be
fulfilled in 2027.
Following this restructuring, the total debt outstanding to
Korea Zinc will amount to $56.7 million with a weighted average
interest rate of 6.2%, based on current LIBOR. This reduces our
interest bill by $0.5 million per annum.
Commenting on the announcement, ZincOx's Chief Executive
Officer, Andrew Woollett, said, "This restructuring increases our
cash headroom over the next couple of years and gives us an overall
interest rate considerably lower than alternative commercial
sources".
For more information please contact:
Tel: +44 (0) 127
ZincOx Resources plc 645 0100
Andrew Woollett, Chief Executive
Officer
Peel Hunt LLP (Nominated Adviser Tel: +44 (0) 207
and Joint Broker) 418 8900
Daniel Harris
Euan Brown
finnCap Limited (Joint Broker) Tel: +44 (0) 207
Charlotte Stranner 220 0500
Joanna Weaving
Christopher Raggett
Tavistock Communications (Financial Tel: +44 (0) 207
PR) 920 3150
Simon Hudson
Nuala Gallagher
This information is provided by RNS
The company news service from the London Stock Exchange
END
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