KME Group Base Borrowing Facility Extension
Reorg’s EMEA Core Credit team has published 19 updates so far this year on KME Group, one of the world’s largest copper producers. In its second-quarter call in October 2020, KME’s management guided that the extension to its borrowing base facility would be concluded in November 2020. By mid-December 2020, the company said it had received extension commitments from 51% of its lenders. At the start of January this year, Reorg reported that the company had obtained the approval of over 70% of its lenders.
The delay in the extension of the facility was due to some lenders’ concern about the sharp rise in copper price, which translates into increased funding requirements for the company, sources said. The implications of rising copper prices on the group’s funding is something that Reorg previously highlighted, especially in the context of reduced working capital funding following the termination of the MKM borrowing base facility.