Amc Still In Game For Debt Package
The Age
Tuesday March 13, 2001
Australian Magnesium Corporation yesterday rejected market talk that the group was struggling to bed down the $700 million-plus debt funding package required to underpin its Stanwell magnesium project near Rockhampton.
There has been speculation that one of the five local and overseas banks working on the package slammed the door on further involvement. But AMC managing director Creagh O'Connor would have none of that yesterday.
``None of the banks have withdrawn. I can say that categorically," Mr O'Connor said. While the debt funding package had yet to be ``banked", the company ``was still very much in the game".
He acknowledged that the debt package - crucial to the $1.3billion Stanwell project proceeding - had taken longer than originally expected to bed down but he expected it to be wrapped up in the next (June) quarter.
The project has been strongly supported by the Queensland and Federal Governments, the shorthand view being that the burgeoning magnesium metal market represented an opportunity to create a major new Australian industry from scratch in much the same way as Alcoa/WMC did with alumina in the 1960s.
The two governments have promised $100million in infrastructure and research support for the project, while the state-owned power utility Stanwell Corporation has agreed to participate in a $70 million secured loan facility that will form part of a capital-cost-overrun reserve account.
AMC has not yet specified the size of the debt funding package it is seeking from the banks, although it has become well known that the follow-up global equity raising to complete the funding requirements will probably weigh in at about $500 million.
It is at the equity raising that the now gold-focused Normandy Mining is expected to let its controlling 62.39 per cent stake be diluted to a lower level. It is Normandy's longer-term intention to distribute its AMC stake to its own shareholders.
© 2001 The Age
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