IFL.L Regulatory News (IFL)

3 Oct 2007 07:00

International Ferro Metals Limited03 October 2007 3 October 2007 International Ferro Metals Limited ("IFL" or the "Company") Commencement of debt restructuring ahead of planned expansion International Ferro Metals Limited (LSE: IFL), the integrated ferrochrome producer, announces completion of the first stage of its planned project debt restructuring in preparation for its intended three-furnace expansion. In July 2007, IFL announced a planned expansion of its integrated ferrochrome processing operations at its Buffelsfontein mine, involving the construction of up to three further furnaces together with ancillary plant ("the Expansion"). The preliminary indicative capital cost of the Expansion has been estimated at R3.2 billion (£229 million). At the same time, the Company announced a placing of new ordinary shares that raised £85 million before expenses to contribute to the cost of the Expansion. The balance of the cost is expected to be covered by debt finance in respect of which a number of offers have been received by IFL. When the Company commenced construction of its original two-furnace ferrochrome operation it funded the project partially from project debt, repayable in stages until 30 September 2013. This outstanding debt, amounting to R833 million (£59.5 million) has now been repaid, leaving IFL essentially debt-free ahead of the completion of the replacement debt structure expected to be put in place during February 2008. As part of the restructuring, the Company has incurred an early repayment cost of R19.9 million (£1.4 million) and has cancelled a total of 1,285,714 options over ordinary IFL shares, with a strike price of £0.3675 per share, held by its original project finance bankers. IFL will use the balance of the proceeds of the July placing, together with amounts released by the debt restructuring from various cash deposits and guarantees associated with the original project debt and augmented by cash flow from the existing operations, to provide the equity portion of the Expansion. Stephen Turner, Managing Director of International Ferro Metals commented "We are grateful to our original project finance lenders, without whom our Buffelsfontein operations would not have been constructed. We are now a substantial, well- capitalised business with strong cash flow in a buoyant ferrochrome market and with an exciting expansion ahead of us. IFL enjoyed a large cash balance at the same time as carrying debt. We are pleased that we have been able to eliminate the short-term inefficiencies in our financial structure in advance of the planned refinancing with the cooperation of our original lenders. We look forward to commencing our expansion from a strong position and with the continuing support of the project finance community". For more information contact: International Ferro Metals LimitedStephen Turner, Managing DirectorMob: +61 418 440 844 Brunswick GroupCarole Cable/Alex TweedTel: +44 207 404 5959 Numis Securities LimitedJohn HarrisonTel: +44 207 260 1000 This information is provided by RNS The company news service from the London Stock Exchange