Australian resource and mineral processing technology company TNG Limited (ASX: TNG) (“TNG” or the“Company”) is pleased to advise that it has further extended the term of the debt financing mandate (“Mandate”) with its exclusive senior debt advisor and arranger, Germany’s KfW IPEX-Bank GmbH (“KfW”), to 11 December 2021.
KfW has been appointed to lead a debt raise of up to US$600 million to underpin the development and construction of the Company’s 100%-owned Mount Peake Vanadium–Titanium-Iron Project (“Project”) in the Northern Territory.
KfW is a specialised solution provider in export and project financing, with a proven track record for undertaking complex project financings worldwide.
Under the Mandate, KfW is responsible for structuring, coordinating, leading, arranging and managing syndication for the targeted debt raising to underpin the Project’s financing package. KfW will also advise TNG on how to maximise, to the greatest extent possible, cover instruments available from export credit agencies.
KfW has been working closely with TNG on the proposed financing structure and due diligence requirements. During the due diligence process, adequate levels of contingency, working capital, debt service reserve amounts and project owner’s costs will be fully evaluated as part of the capital requirements.
The final capital requirements and funding structure for the Project will be confirmed with KfW following completion of the Front-End Engineering and Design (“FEED”) study, currently being undertaken by SMS group and now in its final stages.
However, the financing process has been impacted this year by COVID-19 related interruptions, including delays to the progression of the due diligence process for the debt structuring.
The Company and KfW have therefore agreed to an extension to the term of the Mandate of 12 months to 11 December 2021.
During this period, the Company expects to finalise the FEED study and EPC process, non-process infrastructure works, approvals processes and financing due diligence, allowing it to confirm the funding structure and make a Final Investment Decision (FID) for the Project, subject to any further delays outside of the Company’s control.
KfW will continue to work in conjunction with the KPMG Corporate Finance team to achieve these key milestones.
Management Comment
Commenting on the extension of the Mandate with KfW, TNG’s Managing Director & CEO, Mr Paul Burton, said: “We are very pleased to confirm KfW IPEX-Bank’s ongoing commitment to the financing of the Mount Peake Project given the significant challenges and interruptions that have occurred due to the COVID-19 pandemic during 2020.
“Having the involvement of one of the leading export and project financing banks worldwide as our key financing partner provides us with a secure platform for our finance structure in 2021 and we look forward to continuing a successful working relationship with KfW in the years ahead.”
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