Firms: Herbert Smith Freehills (IFC and Taurus); Norton Rose Fulbright (Tiger Resources)
Deal: The International Finance Corporation (IFC) and Taurus Mining Finance Fund LP provided a senior debt facility to finance Tiger Resources’ Kipoi Copper Project in the Democratic Republic of Congo.
Value: US$162.5 million
Area: Banking and Finance
Key players: Perth partner Rowen Cross and London partner Martin Kavanagh led the team from Herbert Smith Freehills, supported by senior associates Nicolas Hemelaar and Heather Woodward. Lead partners from Norton Rose Fulbright were Jake Howard (Perth), Poupak Bahamin (Paris) and Steve Chemaly (Johannesburg), while James Stewart (Melbourne) led the equity capital raising. They were assisted by Christian Navarro, Kagiso Maine and Katherine Werren in Perth, Chris Mitchell in Melbourne, Sabine Bertin in Paris and Fabio Miceli and Ntombentsha Odolo in Johannesburg.
Deal significance: Tiger Resources was able to secure an eight-year term debt in a deal that spanned six jurisdictions and involved a complex security structure.
The deal, which involved refinancing US$100 million in secured facilities established by Taurus in August 2014, will also provide funding for the expansion of the existing plant at the project.
Taurus provided US$100 million and IFC provided US$40.5 million, with the transaction amounting to a total US$162.5 million in senior debt. The debt also included US$25 million in equity – US$10 million from Resource Capital Funds and US$5 million from IFC.
“Banks and traditional lenders struggle to do long-term debt like this and I’m predicting that we will see more activity from development finance institutions and private debt funds, particularly while commodity markets are forecast to remain subdued,” HSF partner Rowen Cross said.
In conjunction with the debt facility, Tiger undertook an equity capital raising via a share placement and an accelerated non-renounceable entitlement offer to raise gross proceeds of approximately US$22 million, with commitments received from IFC and by Tiger’s existing shareholder, Resource Capital Funds.
NRF partner Jake Howard suggested the successful completion of the refinancing, at a time when copper prices are low, demonstrated "significant confidence in Tiger's management and that the fundamentals for the Kipoi project are sound".
"This financing not only provides a long-term funding solution for Tiger but also supports the expansion of its SX/EW plant, which will result in a significant reduction of Tiger’s production costs," he said.