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Sierra Metals Completes Refinancing Agreement With Major Lenders

May 30, 2023, 07:42 AM
Filed Under: Metals and Mining
Related: Banco Santander

Sierra Metals has finalized the definitive agreement with Banco de Credito del Peru and Banco Santander S.A. to refinance $18.75 million out of the $25 million principal debt repayment obligations that were originally due in 2023 under the Company’s senior secured credit facility. All figures in this news release are stated in U.S. dollars.

The $18.75 million will be due in March 2025. Interest will be accrued at an annualized rate of 6.3% plus the three-month Secured Overnight Financing Rate. In addition, the remaining $6.25 million of the amount owing in 2023, which is not covered as part of the refinancing, will be split in three equal installments due in June, September, and December 2023.

“This refinancing is an important step in the Company’s return to sustainable, long-term growth,” said Ernesto Balarezo, Interim Chief Executive Officer, Sierra Metals. He added, “The updated repayment schedule provides flexibility as we continue to execute on our plan to optimize operations, grow the resources at our core mines and increase production. We appreciate the efforts of our banking partners to reach this agreement.”

In addition to the refinancing of the principal debt repayment obligations for 2023, the Agreement contains certain additional amendments to the terms of the senior secured credit facility, including: (i) covenants regarding executive management continuity; and (ii) mandatory prepayments in the case of excess free cash flow and equity subscription proceeds not required for capital expenditures.

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