Pilbara iron ore producer Atlas Iron will plunge into fresh talks this week on how best to deal with its debt burden, after revealing on Monday it fell almost $100 million short of its target in a critical equity raising.
Atlas’s $US269 million Term Loan B facility, due to be paid in December 2017, has weighed heavily on the junior since the iron ore price crashed last year and the miner will now work swiftly to form a plan to refinance the debt.
From The Australian comes Atlas regrets:
The Australian understands that Atlas had completed documentation for a “company-transforming transaction” with one of three so-called strategic parties with which it was in discussions, but the deal went unsigned after iron ore price posted its biggest single-day fall to its lowest level in more than six years.
“Given the terrible market we had, I don’t think you can call that anything but a vote of confidence,” Mr Flanagan said. “We had a Greek crisis, we had a Chinese crisis and the worst iron ore price fall ever since the index was put together.
…“There seem to be people out there for whom success is Atlas’s failure.”
I guess that means me and, I might add, the rest of Australia. It’s nothing personal, Mr Flanagan, it’s just the sad truth that the sooner you are out of business the better off the country will be.
But no! From the AFR:
…”If we are able to refinance the loan in a way that we are able to push the interest out – there is $2.50 a tonne savings just in that,” he said.
And that will be recycled as iron ore that is $2.50 cheaper for China, given AGO is the marginal cost producer.
Just pause for moment to consider the endless drama in store when in the future FMG occupies that position.
