HomeEast AfricaKEFI chooses bank-loan over bond-lease finance proposal

KEFI chooses bank-loan over bond-lease finance proposal

KEFI Minerals has selected its preferred project infrastructure finance proposal for the company’s Tulu Kapi gold project.

This being a bank loan based proposal recently received from two leading African banks as underwriters and co-lenders.

A preliminary term sheet has been signed and is subject to credit approval.

KEFI Finance Director, John Leach, comments:

“We have been very well supported by the bond-lease proposal and now we also have an attractive bank-loan based alternative because capital market support for our project has recently improved markedly, both inside and outside Ethiopia.

“The expected savings from the preferred bank-based infrastructure finance proposal provide our project subsidiary, TKGM, with the opportunity to develop and further explore the underground Tulu Kapi deposit and significantly increase value for shareholders, without reducing net cash flows available for other purposes.”

The bank-based proposal is considered by the directors of the project company, Tulu Kapi Gold Mines Share Company (TKGM), to be financially more attractive and more straightforward to execute than the long-standing alternative bond-and-lease based debt financing proposal.

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In addition, the proposed bank lenders are actively working in Ethiopia, are familiar with the local market and many of local stakeholders and thus considered more compatible with the project consortium.

There are no charges payable for electing not to proceed with the bondand-lease based debt financing proposal.