Stanmore Resources, the coal miner, does not raise new debt for its proposed acquisition of the metallurgical coal joint venture in Queensland. Unlike most companies doing acquisition, the stake does not belong to Stanmore yet. However, the company argues that it relies heavily on its internal source in order to acquire its remaining 20% stake. The stake now is in BHP Mitsui Coal, the renamed version is Stanmore SMC. This is from Japanese trading house Mitsui & Co. Earlier this year, the company purchased around 80% of its stake in the acquired company.
The company is confident that they could still pay the remaining stake from its internal sources. They argued that their internal sources have already been sufficient enough to meet the ongoing cash requirements. Plus, it is also enough to fund the transaction without having the urge to take debt or raise capital. This information refers to an ASX filling. The acquiring entity is Dampier Coal, the subsidiary of Stanmore Resources.
They expect that the acquisition should be completed by the end of the year. They need the approval from Australia’s Foreign Investment Review Board. This is because in the previous month, the company has paid a $55m bridge loan to raise the purchase of 80% stake. The company has also reduced the loan from the Golden Energy shareholder and Resources from $69m to $44m. These funds comprise $55m bridge loan, $625m five-year loan, and $120m three-year loan. These are loans from Virtue Investment Corp, a company subsidiary of Ascent Global Investment Corp.
They have secured the loan with the interest rate of 8% for as much as $120m. They also offered an upfront fee of 2% of the facility amount plus the commitment fee of 2%.