Chicago 30/12/2015 - Nyrstar NV is launching a metal prepayment financing plan of $150 million as part of its ongoing cost-savings strategy, the company announced on Wednesday.
Arranged by Deutsche Bank, the three-year offtake agreement is linked to the physical delivery of refined zinc to Trafigura.
"Given the challenging metal price environment, today's announcement is a significant milestone in executing our balance sheet strengthening measures," Bill Scotting, CEO of Nyrstar, said.
In early November, the company announced it was pursuing strategic alternatives for its mining business, both individually and as a portfolio.
Falling zinc prices – last trading at $1,631 per tonne on the London Metal Exchange (LME) – has led the company to remove output heading into 2016.
Two weeks ago, the European Commission (EC) approved Trafigura's 20 percent stake after concluding that the de facto control would not adversely affect competition in the European zinc market.
The zinc metal prepayment is an amortising structure with a three-year tenure and a 12-month grace period.
"The facility will be repaid in equal monthly installments over a period of two years," the release said.
Nyrstar concluded by stating that it has already received the prepayment funds in full and will use the cash to strengthen its balance sheet, including refinancing its 2016 maturing bonds.