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JSE-listed fuel producer Renergen has signed a debt retainer letter, valued at $500 million (over R7.7 billion), with US Worldwide Growth Finance Company (DFC) to fund the second section of the Virginia Gasoline Undertaking, based mostly in Free State.
“The debt quantity out there to the corporate will considerably scale back the quantity of fairness wanted, whereas guaranteeing ample headroom to satisfy monetary covenants,” provides Renergen CEO Stefano Marani.
In line with Marani, Renergen is within the means of optimising section two operations and is aiming to attain a goal of as much as 65% of debt funding on the section two venture capital quantity.
In an announcement issued on Monday Renergen added that the DFC, which additionally invested $40 million for the primary section of operations, facilitated a check screening of the proposal for section two financing.
“Renergen and DFC will now start additional evaluation on the venture, together with potential on-site diligence following fee of the section one plant.”
“We discover ourselves in a really robust place as we embark on turning on the Virginia Gasoline Undertaking plant within the coming weeks,” provides Marani.
Renergen, which is the primary business onshore producer of helium and liquified pure fuel (LNG), confirmed in its preliminary last report of its outcomes for the 12 months to finish February 2022, that it was within the last phases of commissioning the Virginia Gasoline Undertaking.
Along with DFC, it says it additionally acquired a number of letters of intent to co-lend for section two operations from further lenders. This, in accordance with Renergen, can have a cumulative worth of greater than $700 million in senior debt, which can exceed the remaining debt requirement.
“The lenders are at the moment within the means of reviewing all supplies within the information room and can be conducting an onsite inspection of section one operations, as a part of the due diligence for the debt financing of section two.”
Nondumiso Lehutso is a Moneyweb intern.
Hear: Stefano Marani on its R1 billion funding from the Central Vitality Fund (March 2022) – or learn the transcript
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