10/03/2014 - 16:00

Atlantic secures more debt funding

10/03/2014 - 16:00

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Struggling miner Atlantic has secured $29.7 million in debt funding from its major shareholder Droxford International and negotiated a standstill arrangement with the majority of its noteholders.

Part of the Windimurra plant that was damaged by fire earlier this month.

Struggling miner Atlantic has secured $29.7 million in debt funding from its major shareholder, Droxford International, and negotiated a standstill arrangement with the majority of its noteholders.

The deal follows a major fire that destroyed part of Atlantic’s Windmurra vanadium plant, and the failure of subsidiary Midwest Vanadium to make interest payments to holders of senior secured notes.

The new funds will allow Midwest Vanadium to work towards rebuilding the benefication plant and to look towards a longer-term restructure of the company.

The deal was foreshadowed last month when Droxford proposed a new $32.6 million loan facility, to which a majority of the note holders had agreed.

The reduced funding reflects an earlier than expected first progress payment under Atlantic's insurance claim.

Atlantic has receieved $11.6 million of the first progress payment of $16.7 million and expects to receive the balance in the coming days.

The iron ore and vanadium miner estimates the combined material damage and business interruption costs from the fire will be in the vicinity of $100 million.

The secured debt facility will mature in August this year.

Atlantic has tapped Droxford for debt funding on a number of occasions over the past year.

Separately, Midwest Vanadium's noteholders have agreed to negotiate in good faith towards executing a definitive agreement which will allow a restructure to go ahead.

Atlantic shares are currently in voluntary suspension, having last traded at 17.5 cents.

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