| Thu 27 Nov 2008, 17:34 | | MTX - Metorex Limited - Media Release Announcement |
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MTX
MEMTX
MTX - Metorex Limited - Media Release Announcement
METOREX LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1934/005478/06)
JSE code: MTX ISIN: ZAE000022745
("Metorex" or "the Company")
MEDIA RELEASE ANNOUNCING
Major capital raising of R922m - via equity and debt placings
Restructuring of existing debt commitments
Ruashi now fully capitalised to ramp up to full production
Metorex has entered into various agreements that will result in a significant
re-capitalisation of the Company. This involves a fresh equity capital
injection of R744 million and a bridging finance loan of R178 million. The
medium term debt is simultaneously to be re-structured providing a longer
term debt profile.
The re-financing is required due to a combination of a capital cost overrun
on the Ruashi project in the Democratic Republic of Congo (DRC) combined with
commissioning delays over the last three months. This has resulted in a
slower build-up of anticipated revenue and cash-flows from the project.
Without this re-financing the project could not be completed which would have
serious consequences for the company.
Metorex requires R700 million to finance the cash flows required to ensure
project completion and ramp up to full production at Ruashi. The
construction is substantially complete. The final estimated total cost of
the completion of the project is approximately US$ 320 million. The increase
is largely due to the scope and extent of the project increasing from the
original feasibility and inflation related capital cost escalations
particularly in relation to stainless steel, cement and diesel prices, and
the significant social development costs incurred on providing water and
electrical distribution for the local communities.
The bridge facility is provided by Standard Bank and accrues interest at
JIBAR plus 7.5% p.a. and is available until 30 November 2009. Repayment will
be made through internal cash generation or potentially the disposal of non-
core assets as appropriate.
Total funding of R922 million exceeds the Ruashi requirements of R700 million
and provides for a group funding reserve.
The new equity will be issued at a price of R2 per share. This will be
through the issue of 372 million shares, of which approximately 129 million
shares are authorised but unissued. The shares will be placed with key
institutional shareholders in the Company, amongst others. To raise the
additional equity, the board is recommending an increase in its authorised
share capital to facilitate the issue of the additional shares. This needs to
be approved by shareholders at a general meeting of the Company to be held on
23rd December 2008.
The issue price was determined by the Board after a book-building exercise
amongst selected institutions, both current and potential new investors, and
represents a discount of 48% to the weighted average traded price of Metorex
shares for the trading day ended on 20 November 2008, being the day before
the finalisation of the book-build.
The Company was keen for all shareholders as far as possible, to be able to
participate in the financing. A claw back offer for the unissued shares
portion of approximately129 million shares is therefore available to
shareholders as recorded on the Company`s register on 19 December 2008 via
nil paid renounceable letters of allocation.
Whilst some may view the re-financing terms as onerous, the financing is
recognised as an achievement considering the current global credit market
conditions and the volatility and weakness of commodity prices, and places
the Company in a healthy financial position in the medium-term.
A circular will be posted to shareholders on 1 December 2008, containing
details of the proposed increase in the authorised share capital and notice
of general meeting. A circular on the claw back offer will be posted on or
about 22 December 2008.
Charles Needham, CEO, said: "This financing has been a major challenge in
what is effectively a closed credit market. It is regretted that the
additional finance was not raised before market conditions deteriorated and
before project delays materialised on our Ruashi project. It is however
testament to the company that we have been able to raise this capital and
reflects on the quality of our assets and is a vote of confidence in the
future of the business."
He added, "We are completely confident in now having raised sufficient funds
to see the Ruashi project through to completion and to provide the necessary
working capital for the group. "
- ENDS -
For further enquiries please contact:
Metorex Limited Charles Needham, Chief Executive Officer
Tel: (+27) 011. 880.3155
College Hill Jacques de Bie or Hayley Crane
Tel: (+27) 011. 447.3030
Date: 27/11/2008 17:34:28 Produced by the JSE SENS Department.
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