Biomass financing secured

RNS Number : 0370U

Drax Group PLC

20 December 2012

 



20 December 2012

DRAX GROUP PLC

(Symbol: DRX)

Biomass Financing Secured

Drax is pleased to announce that it has now secured committed financing to support the Group's transformation into a predominantly biomass-fuelled electricity generator.

We held net cash of £233 million at 30 June 2012, providing a strong foundation for investment in the business. In addition, we have previously announced the following components of our funding programme:

·     £100 million amortising term loan facility agreed with the Prudential / M&G UK Companies Financing Fund in July 2012 (note 1)

·     £190 million (gross) proceeds from an equity placing in October 2012

We have now completed the following additional components of the financing:

·     Up to £100 million amortising term loan facility agreed with the UK Green Investment Bank (note 1)

·     £400 million revolving credit facility maturing in April 2016 (note 2), which will replace the existing £310 million revolving credit facility

Furthermore, we have also successfully executed a new commodity trading facility, which allows Drax to transact prescribed volumes of commodity trades without the requirement to post collateral.

This financing, together with steps we have taken over the last three years to restructure our business and trading arrangements, enables Drax to trade successfully as either an investment grade or sub investment grade entity.

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."

Notes:

(1)   6 to 8 year maturity.

(2)   225 basis points margin over LIBOR.

~~~~~~~~~~~~~~~~~~~~~~~

Enquiries:

Drax Investor Relations: Michael Scott

[phone]

Media:

Drax External Affairs: Melanie Wedgbury

[phone]

Brunswick: Michael Harrison / Andrew Porter

[phone]

Website: www.draxgroup.plc.uk

END

 

END

 

 

MSCEAAAEAENAFFF