Cockatoo Coal (ASX: COK) has entered into a A$65 million loan agreement with KEB Australia Ltd (KEBA) for the ongoing development of the company's coal assets, infrastructure requirements, and working capital.
The loan agreement has a 30 December 2011 maturity and is secured by a guarantee to KEBA from SK Networks Co., Ltd (SKN). SKN is the ultimate parent entity of SK Networks Resources Australia Pty Ltd, a shareholder of Cockatoo Coal.
The company said it has "indemnified SKN for any losses which may be incurred in relation to the facility and have granted SKN a second ranking fixed and floating charge over the company's assets and undertaking."
A first ranking fixed and floating charge has been granted to Macquarie Bank Limited in respect of the A$50 million bank guarantee facility announced on 9 May 2011.
As part of the facility fee, Cockatoo will issue Macquarie 20,833,333 options, each to acquire one fully paid ordinary share in the company at 64 cents per share at any time up to 31 December 2013.
Cockatoo hasn't indicated which projects the funds will be allocated to, however a deal with Mitsui Coal announced on July 8 will enable the joint venture, the North Surat JV, to be a frontrunner in the development of coal mines in the Surat Basin in Queensland.
Originally published at: http://www.proactiveinvestors.com.au/companies/news/18157/cockatoo-coal-secures-a65m-loan-facility-for-development-of-coal-assets-18157.html