New Century turns to US for backing

New Century turns to US for backing
Mining News Pro - New Century Resources is set to raise $US25 million ($35 million) to reduce its company debt despite a positive cashflow from mine operations in the September quarter and improving macroeconomic conditions.

New Century stated that its debt repayment schedule was heavy weighted to the near term, posing a challenge to maintaining sufficient liquidity amid irregular shipping and invoicing cycles.

New Century has about $US48 million to repay after progressively reducing its debt facilities from $US71 million.

The capital raising is expected to reduce company debt by more than 50 per cent.

“The retirement of debt therefore alleviates significant business and financial risk for New Century while also providing the opportunity for capital allocation toward exploration opportunities,” New Century stated in an ASX announcement.

New Century is set to issue new shares at $0.155 per share, which represents a 6 per cent discount to the company’s most recent closing share price of $0.165 per share.

United States investment management company Luxor Capital Group plans to back the raising by purchasing over 133 million New Century shares for $20.7 million, taking its interest in the company to more than 40 per cent.

Luxor has around $US6 billion in assets under management and a significant exposure to the natural resources sector globally.

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