Coal-fired power plant operator Drax has secured committed financing to support the group's transformation into a predominantly biomass-fuelled electricity generator.
As of June 30th this year, the group held net cash of £233m. In addition, as Drax has previously announced, it has additional components of its funding programme comprising a £100m amortising term loan facility agreed with the Prudential/M&G UK Companies Financing Fund in July 2012 and £190m gross proceeds from an equity placing in October 2012.
The statement issued by the company today said it had now completed additional components of the financing comprising up to £100m amortising term loan facility agreed with the UK Green Investment Bank and £400m revolving credit facility maturing in April 2016 which will replace the existing £310 million revolving credit facility.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Drax's company statement added that it has also executed a new commodity trading facility, allowing Drax to transact prescribed volumes of commodity trades without the requirement to post collateral.
Commenting on the refinancing, Tony Quinlan, Finance Director of Drax said: "We are very pleased to have successfully secured this financing. We believe it is a clear demonstration of support from the investment community for our biomass strategy. We particularly welcome the involvement of the UK Green Investment Bank.
"We are making very good progress with our project to transform the largest coal plant in the UK into an electricity generator fuelled predominantly by sustainable biomass. The benefits are multiple, from securing jobs at Drax and across the UK in the supply chain to providing low carbon, cost effective and reliable renewable power for the consumer," he added.
Drax Group's share price down 0.62% to 563.50p art 14:34 on Thursday afternoon.
MF
-
Could investing in sugar protect you during a downturn?Sugar has some defensive qualities during economic downturns, but is now the right time to invest in sugar?
-
Trump’s tariffs: how should the UK respond?Every right-thinking person knows that free trade is a surer route to the wealth of nations than protectionism. So, what is Trump thinking?
