February 21, 2018 - Red Rock Resources and RiverFort Global Capital Collaborate on $4.4m debt package to fund Ferro-Silicon Smelter towards Production
Red Rock Resources collaborated with RiverFort investors to provide secured bridging finance to Steelmin, a ferro-silicon smelter in Bosnia. The investment transaction resulted in Red Rock Resources and RiverFort investors recovering all of their combined principal capital and Red Rock Resources securing a 22% equity interest in Steelmin.
In mid 2017 Red Rock Resources had come across Steelmin in Bosnia just as the latter was looking for the final stage of capital to bring its smelter into production. The opportunity looked to have potentially very attractive operating and financial characteristics once in production.
Steelmin is the owner of a well-built plant in ex-Yugoslavia, with one 48 MVA furnace installed by Elkem and one 30 MVA furnace installed by Tagliaferri. Steelmin was in the final stages of generating production from the first furnace, with a target production run-rate of €36m in annual revenues and €7m EBITDA.
In collaboration with Riverfort, Red Rock executed a process of intensive negotiations and due diligence with Steelmin to complete the ‘last dollar’ finance. On 23 June (and 3 July last year) the deal was announced. Red Rock would borrow a $4.4m Note from a consortium arranged by Riverfort, and would then lend to Steelmin a €3.85m Loan.
By mid-January Steelmin signed up a new longer term lender, which would also provide additional working capital and possibly expansion finance, and on 21 February, less than eight months after the initial announcement, Red Rock Resources announced that its Loan had been repaid in full and it had repaid the remaining part of the Note. After repayment of RiverFort investors, Red Rock holds an undiluted 22% interest in Steelmin which is preparing to start production in the near term.