Western Areas pays $95m debt

Perth nickel miner Western Areas has made a $95 million repayment of convertible bond debt from its existing cash reserves, with a $125 million bond repayment still remaining.

In February, Western Areas placed about 29.5 million ordinary shares and executed a share purchase plan to raise about $104 million, to provide greater flexibility in paying back $235 million worth of convertible bonds.

Western Areas managing director Dan Lougher said the convertible bond repayment debt, which had reached maturity, marked an important milestone for the company.

“By retiring this debt with cash reserves, net profit before tax will improve approximately $12 million in FY15 through reduced interest and bond accretion costs,” he said. 

“Consistent with comments in the March quarterly report, and with a rising nickel price, cashflow generation has been particularly strong in the June quarter.

“This, combined with the reduction in debt, places our balance sheet in a very robust position.” 

Western Areas said the remaining convertible bond repayment is due on July 2 2015. 

The company said its repayment plan remained to utilise existing cash reserves, which would result in a further $12 million improvement in net profit before tax in FY16. 

Western Areas’ share price fell by 1.26 per cent to $4.71 at 11:00am WST.