Tharisa (THS) has signed a US$130 million debt facility with Absa Bank Limited, as initial mandated lead arranger and co-mandated lead arranger, and Standard Bank, as co-mandated lead arranger.

The facility comprises a four-year term loan of US$80 million and a revolving ZAR900 million (US$50 million) credit facility. 

The funds will be used to prepay the balance of the existing term loan and revolving credit facility, and for general corporate and working capital purposes, including investing in the sustainability of the Tharisa chrome and platinum group metals mine in South Africa.

"We are pleased to have successfully executed the debt facilities agreement, an important milestone in strengthening our capital structure and positioning the Tharisa Mine for long-term sustainable growth, as we transition to underground mining,” said Michael Jones, chief financial officer of Tharisa.

“This transaction reduces our overall cost of capital, extends our debt maturities, and enhances financial flexibility-allowing us to better navigate changing market conditions and continue investing in our strategic priorities. The enhanced balance sheet reinforces our commitment to prudent financial management and value creation for shareholders. I want to thank our lending partners for walking this exciting journey with us, and our advisors for their support throughout this process."

 

View from Vox

 

Not a bad time to be re-financing, as Tharisa’s shares have just about doubled in value over the past six months or so, and the outlook for commodity prices is firmer than it has been for some years. Tharisa’s balance sheet in any case looks pretty robust. The company currently has cash in hand of around US$173 million, up by US$9 million from June, and debt of US$104.4 million. That nets out at a cash position of US$68 million, up by nearly US$25 million since June. With those numbers in mind it’s easy to see why the share price has been rising to the extent that Tharisa is now worth nearly US$300 million, and easy to see why the banks would be happy to refinance.