Pilbara Minerals secures new debt facility
Lithium-tantalum producer Pilbara Minerals has been advised on a new US$110 million debt facility.
Firm: Allen & Overy (Pilbara Minerals).
Deal: Pilbara Minerals has secured a new US$110 million debt facility, with the signing of the formal agreements and satisfaction of conditions precedent to drawdown under the US$110 million senior secured debt facility provided by BNP Paribas and the Clean Energy Finance Corporation.
Value: US$110 million.
Area: Banking and finance.
Key players: The A&O team was led by partner Peter Wilkes with support from Julia Burvill and Alexandra Ioppolo.
Deal significance: Proceeds from the finance facility will be used to redeem the outstanding balance owing under the existing US$100 million Nordic Bond (Nordic Bond), A&O said in a statement, which was used to fund the stage 1 development of the Pilgangoora Lithium-Tantalum Project (Pilgangoora Project). The finance facility also includes a US$15 million working capital facility with BNP Paribas.
The new facility “will deliver Pilbara Minerals substantial cost savings when compared to the Nordic Bond”, A&O continued, and provide them “with an extended grace period before quarterly principal repayments commence in September 2022”.
“This places the company in a strong position and will provide greater flexibility to manage its cash flows during this period when lithium demand remains relatively weak, product pricing is under pressure, and market conditions have been impacted by the COVID-19 pandemic,” the firm said.
Speaking about the facility, Mr Wilkes said: “We’re delighted to have advised Pilbara Minerals on this strategically important new debt facility, which significantly reduces the cost of funding for the company’s Pilgangoora lithium and tantalum project. As the involvement of the CEFC in this deal demonstrates, lithium is a strategic mineral in the development of clean energy technology and Pilbara Minerals is now well positioned to benefit from increased global demand for the mineral.”
“Having worked with Pilbara Minerals on the Nordic Bond, the original project financing for the development of the Pilgangoora Project, it is a pleasure to continue to work with the Pilbara Minerals team on their transition from a development company to a leading established lithium producer and the refinancing in line with that transition.”