CASE STUDY

Kenmare Resources Capital Raising and Debt Restructuring

We advised Kenmare on its 2016 capital raise and debt restructuring which saw Kenmare's gross outstanding debt reduced by 74% to US$100 million and provided the company with US$75m of working capital, before expenses.

iconHighlights

Debt reduced by 74%

Achieved through an ambitious capital raising and debt restructuring programme

US$275 million of equity commitments

Comprised of a cornerstone subscription, lender underwriting, firm placing and open offer

US$75 million of working capital

Leaves the company in a strong position in an industry with expectations of a growing supply deficiency

One of the most significant capital raisings by any resources company of 2016

We advise Kenmare, one of the leading global producers of titanium minerals and zircon and the operator of the Moma Titanium Minerals Mine in northern Mozambique. Kenmare has a premium listing on the Official List of the UKLA and a secondary listing on the Official List of the Irish Stock Exchange.

Kenmare showed great resourcefulness and agility in securing an ambitious capital raising and debt restructuring.

In 2016, Kenmare showed great resourcefulness and agility in securing, in difficult market conditions, an ambitious capital raising and debt restructuring that proved to be one of the most significant capital raisings by any resources company of that year and saw Kenmare Resources raise 10 times its market capitalisation, and significantly reduce its debt.

On 30 June 2016, Kenmare announced that it had secured US$275 million of equity commitments, comprised of a US$100 million cornerstone subscription by SGRF, a sovereign wealth fund of the Sultanate of Oman, US$145.7 million cash commitments under a firm placing and US$29.3 million under a lender underwriting. Kenmare then raised a further US$8.9 million by way of an open offer, reducing the lender underwriting by the same amount. Adroitly, Kenmare had secured lender commitment to partially underwrite the capital raise through equitisation of a matching amount of debt. That facility was called upon when, as Kenmare marketed the capital raise, the outcome of the BREXIT referendum in the UK resulted in significant market volatility. Pursuant to a debt restructuring, US$23.8 million of Kenmare’s project debt was equitised into new ordinary shares and issued to its lenders.

The completion of the capital raise and debt restructuring saw Kenmare’s gross outstanding debt reduced by 74% to US$100m and provided the company with US$75m of working capital, before expenses.

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