RBC Capital says debt restructure should lift Kenmare

14th Feb 2014 15:10

Broker RBC Capital Markets says a debt restructuring deal agreed by Mozambique titanium miner Kenmare Resources should remove any need for a fund-raising and could boost its share price.Kenmare was facing a debt payment of $143m by August 2015, but the deal with lenders it announced on Friday has rescheduled its debt significantly. It removes an obligation to repay all deferred subordinated debt by August 1st 2015 and reschedules all such debt unpaid as of July 31st 2015.Under the new deal, half the deferred subordinated debt will be amortised in nine equal semi-annual installments starting in August 2015 and ending on August 1st 2019. The balance will be repaid in one installment in August 2019.RBC said soft mineral sand prices, power disruption in Mozambique and the corresponding pressure on Kenmare's balance sheet had driven recent share price weakness.The broker said: "This arrangement has relieved significant pressure on the balance sheet and should have a positive impact on share price performance, in our view."Shares in Kenmare rose 0.97p or 6.1% to 16.9p by 15:31 in London.PW