South African coal mining and development company, Keaton Energy has received a R300mn term loan and a R50mn working capital facility from Investec Bank.
R170mn of the loan will be used to pay the remaining balance of financing made available by Nedbank in 2011 for the construction of the Vanggatfontein coal washing plant and ancillary facilities.
R130mn of the loan will be used for part of the purchase consideration for Xceed Resources Limited. The working capital facility of R50 million is available for general purposes.
“We are pleased to have concluded this important financing at a time when Keaton is in a strong growth phase. We will conclude the Xceed acquisition on an all-cash basis as announced previously and, importantly, the replacement of the Vanggatfontein project finance debt with a term loan provides us not only with greater financial flexibility within the Keaton group but also reduces our cost of capital,” says Mandi Glad, Keaton’s CEO, in a recent release.
Glad adds that the availability of a further R50mn facility, coupled with the company’s growing cash reserves, positions Keaton to take advantage of any opportunities that may arise in the market.