Geo Energy Resources has received US$220 million in term loan facilities from Bank Mandiri to help fund acquisitions so that it can double down on the coal industry.
The plans to secure the facilities, which will mature in five years, were first announced back in July 26 after a binding term sheet was signed.
The loan is pegged to the Secured Overnight Financing Rate plus 3.25%, which works out to around 8.5% now based on current rates.
Geo Energy's executive chairman and CEO Charles Antonny Melati calls the loan facilities a "key driver" for the company's growth following the "transformational acquisition" of a controlling stake in PT Golden Eagle Energy, a listed Indonesian coal mining group.
The planned acquisition, first announced on July 26, will help increase Geo Energy's volume of coal reserves significantly, given how the PT Triayani mine now under Golden Eagle Energy has proved and probable reserves of almost 300 million tonnes.
"The loan facilities will provide the group with strong working capital and liquidity to unlock the value of these reserves," says Melati.
The funding will help Geo Energy meet annual production target of 25 million tonnes.
"Securing these loan facilities at such significant quantum with competitive terms shows the strength of our financials and credit standing,” says Melati.
Geo Energy closed on Sept 22 at 23 cents, unchanged for the day.
