17/08/2015 - 15:15

Pluton seeks cash to shore up business

17/08/2015 - 15:15

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Pluton Resources has formed a royalty payment plan with the state government and is seeking funding to meet ongoing debt repayments.

Pluton seeks cash to shore up business
Pluton's Cockatoo Island iron ore project.

Pluton Resources has formed a royalty payment plan with the state government and is seeking funding to meet ongoing debt repayments.

In a statement today, Pluton said it was in negotiations with its unsecured creditors in the hope of agreeing to a settlement for its outstanding debts.

“The outcome of these negotiations will be crucial to the ongoing operations of Pluton and may determine whether the company can continue as a going concern,” the company said.

But its payment plan with the state government means Pluton will pay $1.5 million of its outstanding royalty by August 21, with the remainder to be paid by the end of October.

Pluton is also in the middle of conducting a bond offer to raise up to about $75.3 million, however it has been faced with delays in receiving proceeds from the offer.

“The company is in the process of considering alternative options to source funding for immediate working capital, repayment of creditors and future capital expenditure,” it said.

“The company’s largest shareholder, General Nice Resources, has reaffirmed its commitment to support the company via a proposed bridge financing arrangement to ensure payment of Pluton’s royalty obligations and payment of debts related to the period the company was in receivership.”

Pluton said the outcome of its negotiations with its unsecured creditors would also affect the availability and terms of General Nice’s proposed deal.

The company’s Cockatoo Island iron ore project has been placed on care and maintenance, until an outcome of the creditor negotiations has been reached.

Pluton shares have been suspended from trade since May 29.

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