W Resources Plc (LSE:WRES) announced that it has signed a credit and guaranty agreement with the lenders, including one or more funds managed by BlackRock Financial Management Inc. to provide a US$35 million secured term loan facility to W Resources to fund the La Parrilla mine development.
Highlights are as follows:
- The Loan is for a scheduled term of five years, with a two year non call period. The Company has the right to repay the Loan after two years for a premium of 5%, after three years for a premium of 3%, and after four years for no premium;
- Subject to any early repayment permitted or required under the Agreement, repayment will made by way of a cash flow sweep, utilising free cash to repay the loan;
- The Loan is subject to an average 5 year interest rate of 12.6%, being 14% in the first year, 13% in the second year and 12% thereafter;
- First year interest is Payable in Kind (“PIK”) and added to the principal, while 50% of the second year interest is PIK and 50% is payable in cash;
- Lenders will receive a non-refundable upfront fee of 3% of the face value of each of the respective Loan disbursements;
- Lenders will receive warrants totalling 5% of W’s fully diluted equity.
Michael Masterman, chairman of W Resources, commented:
We are delighted to have partnered with BlackRock to obtain this US$35 million secured term loan facility. The Loan provides full funding for La Parrilla and now it is full steam ahead. Engineering and planning at La Parrilla is advanced and the three primary construction contracts have been awarded. As outlined, the timetable to deliver the project is 12 months from the close of financing which moves the Company into production in Q1 2019.