Sumatra Copper & Gold Plc said Oct. 7 that its PT Dwinad Nusa Sejahtera, or DNS, unit has executed a VAT financing facility with PT Bank UOB Indonesia, under which the bank has agreed to advance up to 60 billion Indonesian rupiah or its equivalent in U.S. dollars to DNS.
The facility bears an interest rate of LIBOR plus up to 4% for advances in U.S. dollars or JIBOR plus 5% for Indonesian rupiah and is subject to a 2% facility fee. The funds will be available for six months from the deal's execution and its final maturity date will be 18 months after the availability period.
An initial drawdown of about US$2 million to US$2.5 million is expected within the week, with the proceeds proposed to be used as general working capital. The funds will serve as a prepayment of VAT claims that DNS lodged with Indonesian tax authorities.
The repayment of the facility will be due upon receipt of the VAT refund payment or the facility's maturity date, whichever is earlier.
In accordance with the parties' deal, the facility is secure by way of corporate guarantee from Sumatra, a pledge of DNS' VAT account to the bank and the assignment of DNS' VAT claims and all the proceeds from its VAT refunds to the order of the bank. PT Provident Capital Indonesia, Sumatra's major shareholder, also provided a corporate guarantee for the VAT facility.
As of Oct. 7, US$1 was equivalent to 12,957.50 Indonesian rupiah.