Straits Asia signs deal to refinance US$380 million debt

Singapore coal miner Straits Asia Resources announced yesterday that it entered into a five year club financing facility for US$380m.

The Facility is fully committed for five years and comprises a term loan facility of US$250m, a revolving working capital facility of US$50m and a Letter of Credit/bank guarantee facility of US$80m. The Facility will be used to refinance an existing US$255m facility, provide additional working capital and funds for Straits Asia’s planned expansion of its coal production.

The term loan requires no repayments for a period of three years. Thereafter Straits Asia is to repay instalments of US$40m in six monthly intervals after the date of first utilisation. The balance is to be repaid upon maturity in January 2015.

The completion of this Facility provides a strong financial foundation for Straits Asia to unlock significant value for its shareholders through the growth of its Sebuku and Jembayan coal operations.

The club of banks forming the Facility is Siam Commercial Bank, Krung Thai Bank, Bangkok Bank and Standard Chartered Bank.

The five year Facility should significantly reduce the financing costs of Straits Asia, with the first drawdown targeted for January 2010.