Volt has engaged Exotix Capital to undertake a Tanzanian Bond issue to raise the required funding for the development of Stage 1 of its Bunyu project.
Following recent meetings with targeted investment groups in Tanzania, Uganda and Kenya, Exotix has recommended Volt proceed with a formal bond prospectus process and listing of the bonds on the Dar es Salaam Stock Exchange (DSE) in Tanzania.
The estimated timeframe to complete the bond prospectus and DSE listing is 8-12 weeks.
Volt and Exotix have sized the debt transaction at $40 million on the key terms set out below which will allow net project development and working capital funding of ~$31 million after taking into account a Debt Service Reserve Account (DSRA) and costs of the issue.
The facility interest and bond maturity payments can be serviced by projected project cash flows.
Importantly, the $40 million debt sizing allows meaningful participation from Tanzanian and Ugandan Pension Funds combined with other investment groups seeking fixed income investments.
Key Bond Terms
|Issuer||Volt Graphite Tanzania PLC (“Volt” or the “Issuer”)|
|Issuing Venue||Dar es Salaam Stock Exchange EGM|
|Amount||US$40,000,000 USD-linked Tanzanian Shilling Denominated|
|Maturity||7 years, (2025)|
|Structure||Coupon will be payable in cash A Debt Service Reserve Account (“DSRA”) is to be withheld by the Issuer to service payments on the Notes for a period of twelve months|
|Payment Format||US Dollar Linked: Coupon payments to investors will be paid at the market exchange rate on the day of coupon payment|
|Issuance Date||February 2018|
This funding pathway provides for local investment in the largest graphite project in Tanzania and one of the largest in the world.
With local job creation and skills acquisition, local business opportunities and significant export revenue for Tanzania, the Bunyu graphite project provides Tanzania with the opportunity to become a significant part of the global new energy sector.
Volt’s Bunyu Graphite Project can produce graphite suitable for battery anode production, flame retardant building material uses, the developing graphene industry and traditional markets including refractories.
“We are buoyed by the level of support received from the Exotix bond roadshow. The appetite for investing in local resource projects in this market is evident by the positive response received to date and the increased sizing of the bond issue provides us with added financial flexibility as we target the successful Stage 1 development of our Bunyu Graphite Project over the next 12 months,” says Volt CEO Trevor Matthews.