FMG commits to paying down debt stockpile

Leading Fortescue Metals Group’s Annual General Meeting on Wednesday were announcements the iron ore miner will be forging ahead, ramping up production and paying down stockpiles of debt.

Addressing shareholders this week the company said it will next month move to voluntarily repay $US1 billion out of $US2.04 billion senior unsecured notes not due until 2015.

Subject to market conditions FMG said it will pay off the remaining $US1.04 billion balance in coming months.

FMG chief executive officer Nev Power described the payments as an “historical turning point for the company”.

"We have consistently delivered against our commitments and will continue to rapidly de-gear our balance sheet," he said.

Earlier this week FMG repriced its senior secured credit facility, lowering its interest payments on its debt pile which FMG says will deliver interest savings of about $US50 million a year.

Fortescue Chief Financial Officer Stephen Pearce said capital expenditure cuts and expansion projects are enabling early debt payments to be made.

“This continues to lower Fortescue’s cost base and, together with the recently completed Term Loan re-pricing, means Fortescue’s interest costs will immediately reduce by $US132 million per annum,” he said.

FMG said it is committed to growth, aiming to ramp up to 155 million tonnes per annum by March next year.

In the 2013 financial year the company shipped 81 million tonnes of iron ore.

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