Allen & Overy advises Pilbara Minerals on new USD110 million debt facility
15 September 2020
Allen & Overy has advised leading lithium tantalum producer Pilbara Minerals (ASX: PLS) and its subsidiaries on the establishment of a new, low-cost USD110 million debt facility.
Financial close was achieved under the new Facility Agreement on 14 September 2020 with the signing of the formal agreements and satisfaction of conditions precedent to drawdown under the US$110 million senior secured debt facility (Finance Facility) provide by leading international bank, BNP Paribas, and Australia’s specialist clean energy investor, the Clean Energy Finance Corporation (CEFC).
Proceeds from the Finance Facility will be used to redeem the outstanding balance owing under the existing US$100M Nordic Bond (Nordic Bond), 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 saving when compared to the Nordic Bond. It will also provide Pilbara Minerals with an extended grace period before quarterly principal repayments commence in September 2022. This places the Company is 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.
Perth-based Allen & Overy partner Peter Wilkes commented: “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.”
The Allen & Overy team advising Pilbara is led by partner Peter Wilkes with support from Julia Burvill and Alexandra Ioppolo.
For further information, please contact Georgia Bennett on +61 434 008 209 or email email@example.com.