Local chemicals company Penrice Soda has dipped into the debt well again, confirming another $2 million borrowing to fund capital and cost over-runs.
The company announced yesterday TMPA Investment Trust, a special purpose vehicle representing a private investor, had agreed to provide $2 million to fund “working and maintenance capital” and would be drawn down immediately to meet short term needs.
The capital is repayable in three years in cash or capital and interest payable quarterly at 10 per cent.
Penrice Managing Director and CEO Guy Roberts claimed the Osborne-based business’s transformation was still on track.
“Penrice’s business transformation has incurred some one-off capital and cost overruns in the first quarter as the new chemicals plant was commissioned, however in the second quarter the benefits of the company’s new business model are beginning to show,” Roberts said.
“The soda ash losses of the past have been stopped with the closure of the soda ash plant.
“The bicarbonate plant is running at planned production rates with bicarbonate sales also in line with plan.
“In the new lime business, the new lime plant is running at planned production rates, with sales commencing and market acceptance building in line with expectations.
“This is a transition year aimed at bedding down the restructure and a raft of operational and sales changes and things are progressing.”
Roberts remained bullish about the company’s prospects.
“Despite the under budget first quarter bedding down the restructure, Penrice still expects improved earnings in FY2014, subject to economic conditions.
“FY2015 will still be the first full year of earnings uplift following the business transformation of FY2013, with a forecast upside to the current year.
“Penrice continues to seek to restructure its existing debt load. Further updates will be given when appropriate to do so.”
Last year the company negotiated a $97 million senior debt facility including the extension of a $67.8 million facility to August 2017, with interest on that facility to be capitalised and not paid, to assist the company’s cash flow.
In August it’s full year financial results showed an underlying net loss after tax of $21.4 million (FY2012: $6.7 million) and statutory net loss after tax $50.1 million (FY2012: $63.6 million).
It also showed net debt had increased to $112.1 million.
Shares in Penrice fell by 15 per cent on low volume Monday to 3.4 cents.
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