Paladin addresses financial position with complex restructure

Image: Paladin Energy

Paladin Energy is planning an extensive financial restructure as it continues to face challenges in the struggling global uranium market.

The move follows a lack of progress with Paladin’s hopes to offload its 24 per cent interest in the Langer Heinrich uranium mine in Namibia to meet a $US212 million debt repayment due on April 30.

Paladin’s complex restructure proposes that $US362 million of existing convertible bonds would be exchanged into $US115 million of new secured bonds due in 2022, $US102 million of new convertible bonds due in 2024, and $US145 million worth of new shares for issue to bondholders. Any accrued unpaid interest would also be exchanged into new secured bonds and new convertible bonds on a 75-25 basis.

In an ASX announcement, Paladin stated that bondholders, representing 57 per cent of the company’s 2017 convertible bonds and 41 per cent of its 2020 convertible bonds, had already signed up to support the proposal.

However, the planned restructure requires approval of Paladin’s French offtake partner, EDF, as well as formal acceptance from 75 per cent of its existing convertible bond holders and shareholders.

Paladin chief executive officer Alex Molyneux said the company would have a manageable debt load with a longer-term repayment profile by undertaking the proposed restructure.

He added that this would mean “the company is better positioned to ride out the current poor uranium market conditions.”

“The precipitous fall in uranium prices to 12-year lows in 2016 was largely exacerbated by a lack of purchasing activity from US nuclear utilities. However, we might just be seeing a reversal of that now,” Molyneux said.