Article – Roy Hill close to $7b debt deal

10 February 2014
Nick Evans
The West Australian

Gina Rinehart’s Roy Hill project could finalise its $7 billion debt financing by the end of this month, according one of the project’s key investors.

The news comes as Roy Hill’s equity partners – including Mrs Rinehart’s Hancock Prospecting, Marubeni, Korean conglomerate POSCO and Taiwanese steelmaker China Steel Corporation – approach $4 billion in spending on the 55-million-tonne-a-year iron ore project.
Japan’s Marubeni Corp, which owns 15 per cent of Roy Hill, released its third-quarter financial results on Friday. Bloomberg reported that Marubeni chief financial officer Yukihiko Matsumura told journalists then that Marubeni hoped Roy Hill’s $7 billion project finance deal would be finalised by the end of the month.
Having received commitments worth more than $US4 billion from global export credit agencies, Roy Hill is understood to be awaiting only final agreements with commercial lenders to lock away its debt package.
A spokesman for Roy Hill would not be drawn on deadlines for the commercial loans but said Roy Hill was making “good progress”. “We have in-principle agreement to key terms but there is still a lot of documentation to finalise,” he said.
BNP Paribas and NAB are leading the bookbuild for the commercial debt round and Mr Matsumura said on Friday three of Japan’s so-called “super banks” – the Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Financial Group and Mizuho Bank – would take up parts of the syndicated debt package.
The project’s equity partners have been pouring money into Roy Hill as they await the results of the debt negotiations. According to filings with the Australian Securities and Investments Commission, by April the consortium had collectively contributed $3.74 billion, with $934.8 million still available to Roy Hill in equity contributions. Through a Hancock subsidiary, Mrs Rinehart had contributed $1.01 billion of that total.
Courtesy of The West Australian