Oz Digs Deeper For Bridging Loan
The Age
Saturday January 10, 2009
OZ MINERALS has not yet secured a crucial bridging loan to give it enough money to continue operating its mines and complete construction of its Prominent Hill project before a February 27 deadline to refinance $1 billion of debt.
The miner last month asked lenders to formally respond to its request for a bridging loan by last night. But due to time-zone differences, it is possible the market will not be updated until early next week."We are dealing with a number of banks across a number of jurisdictions," said an OZ spokesman, Matthew Foran.He said the company had been negotiating the terms with the banks and expected it would be able to sign off on any proposal relatively quickly.OZ has refused to disclose the amount of bridging finance it is seeking.As of December 30, it had $169.2 million of cash reserves, but has been burning through funds rapidly.UBS analyst Jo Battershill estimated OZ could be seeking $50 million to $100million to give it enough cash to operate through to the end of February. That would help it complete Prominent Hill and development projects at its Golden Grove mine."Bridging facilities are horrendously expensive, so you would want to minimise the amount," Mr Battershill said.He said OZ might delay payments to suppliers until it refinanced its debt or sold assets.He said the interest rate on the bridging facility could be higher than the "absolutely exceptional" price Goldman Sachs JBWere is charging rival miner PanAust for a one-year debt rollover.PanAust's package includes a 15 per cent interest rate and 150million options, which are already in the money.OZ yesterday said it would postpone the release of its quarterly report until January 30, the last day for producing December-quarter reports as opposed to the originally scheduled January 21.Shareholders will remain in the dark about its production and cost performance and the level of completion of its $1.15billion Prominent Hill copper-gold mine for an extra nine days.Mr Battershill said asset sales, possibly including all or part of Prominent Hill, would be "a given" if OZ could not refinance its debt by the end of next month.
© 2009 The Age
