Resource Generation, the dual-listed coal developer, has appointed RMB as lead arranger and co-lender for the financing of its Boikarabelo coal project in the Waterberg.

Following intensive discussions, including due diligence investigations, with a number of parties concerning proposed funding solutions in the last few weeks of 2015 and during January and February of 2016, Resource Generation has revealed its “preferred funding solution”.

This is solution is the debt funding has been referred to previous and entails negotiations with:

  • FirstRand Bank, acting through RMB;
  • Hong Kong & Shanghai Banking Corporation (HSBC);
  • Noble Group;
  • Public Investment Corporation of South Africa SOC (PIC);
  • Industrial Development Corporation (IDC); and
  • Export Finance and Insurance Corporation – (collectively ‘the debt club’).

All members of the debt club have renewed their commitment to work with Resource Generation to finalise a commercially competitive and sustainable funding solution as soon as possible.

[quote]The strategic realignment of the project with South Africa, and the appointment of South African representatives to the Board, has secured a high degree of goodwill from the South African prospective lenders; HSBC, RMB, PIC and IDC, from whom the bulk of the debt funding would be sourced.

More recently, RMB completed a project funding package entailing a R10 billion debt facility for a client despite the prevailing difficult economic climate. Resource Generation is confident that RMB and all members of the debt club are committed to complete the funding process in the shortest time possible the company states in a public announcement.

In conjunction with RMB, the company is also considering numerous providers of funding and credible solutions will be incorporated into the debt club as required.

Termination of discussion with HAB

Resource Generation previously made announcements on 30 September 2015 concerning a Memorandum of

Understanding between itself and HAB & JPR Priv’e (HAB), which was there described as “a Swiss private company”.

Those announcements were authorised by the previous management and Board of the Company which were replaced in the shareholder requisitioned general meeting on 26 November 2015.

The newly appointed management and Board of ResGen has, since those announcements, sought clarification as to the identity of the principals of HAB, the source of funds, the track record of the ultimate lender and the ability of HAB to provide funding as previously suggested in the 30 September 2015 announcements.

The company has not received satisfactory responses, or even confirmation that HAB is able to provide such funding. Accordingly, the company has ceased communication with HAB to pursue a funding solution.