Geo Energy secures US$220 million term loan for expansion

INDONESIAN coal producer Geo Energy Resources has secured US$220 million in term loan facilities from Bank Mandiri to be used for funding acquisitions, working capital and other capital expenditure requirements.

The Singapore-listed firm in a bourse filing on Saturday (Sep 23) said that the term loan carries “a very competitive” interest rate – pegged to Term Secured Overnight Financing Rate (SOFR) plus 3.25 per cent per annum – currently about 8.5 per cent, with a tenor of up to five years.

SOFR is a broad measure of the cost of borrowing cash overnight collateralised by Treasury securities. As at Sep 22, the Term SOFR was 5.47951 per cent.

The loan facilities will provide the group with strong working capital and liquidity to unlock the value of its core asset – the Triaryani mine, which has proved and probable reserves of almost 300 million tonnes, Geo said.

The loan will allow the group to also ramp up production levels and fund the mining and infrastructure development required to support and achieve the Triaryani mine’s targeted production volume of 25 million tonnes annually.

Geo shares were flat at S$0.225 last Friday, before this filing was published.