JOHANNESBURG (miningweekly.com) – Project lenders to TSX-listed Sherritt International’s 40%-owned Ambatovy joint venture (JV), in Madagascar, have agreed to grant the company and its JV partners six principal payment deferrals totalling $565-million.
The Ambatovy JV, in which Sumitomo Corporation holds 32.5% and Korea Resources Corporation 27.5%, has debt of $1.6-billion.
Sherritt notes that the agreement with project lenders provides additional time for nickel prices to recover and for the JV partners to manage their ongoing funding requirements.
The company last month warned that more than 60% of the world’s nickel production was “under water on a cash margin basis”, despite some price recovery since the start of this year.
“Reaching this agreement goes a long way toward resolving uncertainty around Ambatovy. We are pleased with the cooperation among partners and lenders and continue to talk constructively,” Sherritt president and CEO David Pathe said on Thursday.
Cash interest payments will continue to be made semi-annually, while the six deferred principal payments will carry an additional 2% interest cost to accrue on a payment-in-kind (PIK) basis until their repayment.
The deferred principal and PIK interest thereon will be repaid on a schedule starting in 2021, or earlier, subject to cash flow generation.
Edited by: Chanel de Bruyn
Creamer Media Senior Deputy Editor Online
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