NEW YORK Atlantic Ltd. has reached an agreement on an Australian $32.6-million ($29.4-million) funding facility aimed at helping the vanadium producer recover from liquidity issues and a fire at its Windimurra facility in Western Australia.
Singapore-based Droxford International Ltd., the companys largest shareholder, will provide the funding.
Under the new financing proposal, A$3.6 million ($3.3 million) will be released to Atlantic subsidiary Midwest Vanadium Pty Ltd. (MVPL) "in the very near term to allow it to meet immediate commitments," the company said in a statement Feb. 19.
The new financing proposal will also involve a standstill on MVPLs interest reserve account and interest payment obligations to holders of its senior secured notes until at least August 2014.
Perth, Australia-based Atlantic entered financing discussions with Droxford and the noteholders after MVPL failed to make the scheduled February interest payment on its senior secured notes (amm.com, Feb. 18).
The company revealed this week that it could take nine months to repair the damage from the Windimurra fire and return to its previous production rate.
Last week, ratings agency Standard & Poors Ratings Services lowered MVPLs rating to "CCC-" from "CCC" and placed the company on CreditWatch, citing "weak liquidity and lower-than-expected cash flows."