First Quantum to amend $2.2 billion bank facilities, extend to 2027

By Wendy Van Sickle

Columbus, Ohio, Feb. 21 – First Quantum Minerals Ltd. is planning to amend and extend its $2.2 billion of corporate bank facilities, with the amendment to revise the leverage covenant and extend the maturity to April 2027, according to a news release.

The amendment is part of a comprehensive refinancing and will also provide covenant headroom, increasing the net leverage text to 5.75x from 3.5x.

All material debt amortization will be deferred until June 2025, the company said.

First Quantum is also planning to redeem all of its outstanding senior notes due 2025 and 2026 with proceeds of $1.6 billion of senior secured second-lien notes.

Further, the company announced a $500 million copper prepayment agreement and a $1 billion bought deal offering of its common shares.

The refinancing is expected to reduce First Quantum’s net leverage to 2.3x, increase its financial flexibility, enhance its liquidity to $2 billion with the copper prepayment agreement and provide a runway to complete the S3 Expansion project at Kansanshi and enable a pathway toward resolution in Panama.

“It is pleasing to announce these four transactions as part of our holistic approach to strengthen the balance sheet. Today’s actions result in a capital structure that will enable us to deliver the S3 Expansion, which will return the company to a position of strong free cash flow generation. We continue to be committed to working with the government of Panama on the responsible stewardship of Cobre Panama with the implementation of our preservation and safe management plan. At the same time, I remain confident that we can reach a resolution that will deliver the best outcome for the people of Panama and for First Quantum,” Tristan Pascall, chief executive officer of First Quantum, said in the release.

Pascall said the transaction received support from the company’s lenders, bondholders and shareholders. It added that it would advance further initiatives, including asset and stake sales.

First Quantum is a Vancouver, B.C.-based copper, nickel, gold and zinc mining company.

© 2015 Prospect News.
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