Three-month Grace For Murrin Murrin
Sydney Morning Herald
Thursday March 28, 2002
Anaconda Nickel can continue operating its Murrin Murrin nickel mine for at least another three months after secured creditors agreed to the terms of a $US10 millon loan from its largest shareholder Glencore.
Without the loan, Anaconda would have struggled to meet the cash call requirements of the $1 billion nickel mine near Leonora in Western Australia.
The funding comes as Anaconda continues delicate negotiations with US bondholders owed $US420 million by the company, about a financial restructure aimed at staving off financial ruin.
Anaconda is already in default of its loan agreements for this month after posting a $457.5 million net loss for the six months to December 31.
``This short-term funding is only the first phase of a restructuring negotiation process with secured creditors regarding its longer term liquidity which Anaconda anticipates will take several months," the company said yesterday. ``Anaconda will continue formal negotiations with its secured creditors in the ensuing months and has a reasonable expectation to restructure its debt and to recapitalise."
Although Anaconda can afford to make this month's $US15.9 million interest payment to the bondholders, it can not top up a loan reserve account with a similar amount.
As part of the financing arrangements put in place with Anaconda's then chief executive Andrew Forrest in 1997, bondholders require their next half yearly interest payment to be put in a special trust account six months in advance.
Mr Johnston pleaded with bondholders to support Anaconda for another 18 months to enable it to reach full production, during a five-hour meeting in New York less then 10 days ago.
The bondholders are now conducting their own due diligence before deciding whether to support the restructuring.
© 2002 Sydney Morning Herald
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