Sumatra Copper & Gold’s wholly-owned Indonesian subsidiary PT Dwinad Nusa Sejahtera (DNS) has executed a VAT financing facility with PT Bank UOB Indonesia. The facility will see DNS advanced up to 60 billion Rupiah or its equivalent in US dollars (about $4.6 million).
This comes as a prepayment of VAT claims lodged with Indonesian tax authorities.
The key terms of the VAT facility are:
- Availability period of 6 months from the date of execution;
- Final maturity date 18 months after the availability period;
- Repayment upon receipt of the various VAT refund payment from the Indonesian tax authorities or the maturity date of the VAT facility, whichever is the earlier;
- 2% facility fee;
- Interest rate equal to LIBOR plus up to 4% for US dollars or JIBOR + 5% for Indonesian Rupiah.
The VAT facility is secured by way of corporate guarantee from Sumatra C&G, a pledge of DNS’ VAT account to UOB and assignment of DNS’ VAT claims and all proceeds from VAT refunds received from the Indonesian tax authorities to the order of UOB.
In addition, Sumatra C&G’s major shareholder, PT Provident Capital Indonesia, has provided a corporate guarantee for the VAT facility.
Initial drawdown of approximately US$2.0-2.5 million of the facility is expected shortly. Sumatra C&G intends to apply the funds to general working capital.
Sumatra C&G is a gold and silver producer and precious metals explorer in South Sumatra, Indonesia. The company’s flagship asset is the Tembang Gold-Silver Project, which is currently in production.