Debt holdback signed for Virginia gas project phase 2 operations

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Renergen is pleased to announce that it has signed a mandate letter with the US International Development Finance Corporation (DFC), to consider granting a loan of up to US$500 million to finance the development of the phase 2 helium and natural gas operations at the Virginia Gas Project.

DFC, which provided $40 million for Phase 1 operations, has conducted a preliminary review of the Phase 2 funding proposal. Renergen and DFC will now begin further analysis of the project, including possible due diligence. on site after commissioning of phase 1 of the plant.

In addition to DFC, Renergen has also received multiple Letters of Intent (LOIs) to co-lend alongside DFC for Phase 2 operations from additional lenders, with a cumulative value of over $700 million. US in senior debt, which will exceed the remaining debt requirement.

The lenders are currently reviewing all data room documentation and will conduct an on-site inspection of Phase 1 operations, as part of due diligence for Phase 2 debt financing.

“We are in a very strong position as we begin commissioning the Virginia Gas project plant in the coming weeks. The company has grown significantly in size and scale and, importantly, they can now set terms to suit our funding needs.

“We are in the process of optimizing Phase 2 operations as part of the ongoing due diligence process and aim to achieve a target of up to 65% debt financing, the balance of equity, on the amount capital from the Phase 2 project. The amount of debt available to the Company will significantly reduce the amount of equity needed while ensuring sufficient headroom to meet financial covenants,” said Stefano Marani, CEO.

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