Keaton Energy has concluded a financing facility with Investec Bank whereby Investec has provided Keaton with a R300 million term loan and a R50 million working capital facility.
R170 million of the term loan has been used to retire the remaining balance of the project finance facility advanced by Nedbank in 2011 for the construction of the Vanggatfontein coal washing plant and ancillary facilities. R130 million of the term loan is to be applied as part of the purchase consideration for Xceed Resources Limited as advised in the SENS announcement of 20 November 2013. The working capital facility of R50 million is available for general purposes.
Mandi Glad, Keaton’s CEO, said “We are pleased to have concluded this important financing at a time when Keaton is in a strong growth phase. We will conclude the Xceed acquisition on an all-cash basis as announced previously and, importantly, the replacement of the Vanggatfontein project finance debt with a term loan provides us not only with greater financial flexibility within the Keaton group but also reduces our cost of capital. In addition, the availability of a further R50 million facility, coupled with our growing cash reserves, positions Keaton to take advantage of any opportunities that may arise in the market.”