Narrative
Full Description
Project narrative
On December 23, 2011, the Industrial and Commercial Bank of China Ltd. (ICBC) provided a $203 million USD loan to Yancoal International (Holding) Co., Limited for the acquisition of potash exploration rights as well as potash exploration and operations in Canada. The loan was guaranteed by the Yankuang Group and Yancoal International. The loan had an estimated interest rate of 3.404%, based on the average LIBOR rate of 1.1% in December 2011 plus a margin of 2.6%. The loan had a 12-month maturity. Prepayments were permitted only after 10 days’ written notice to, and approval from, ICBC and must include additional 1% of the voluntary payment amount. Mandatory prepayment was required if Yancoal International receives funds from refinancing or sale of assets. In addition to the terms of the loan, Yancoal International agreed that written permission from ICBC was required before the company was able to use its assets or income to provide guarantees, or to engage in any contract, acquisition, or other exchange in capital or shares. In addition, ICBC gained the right to examine and supervise any new debts, guarantees, capital expenditures, sales of assets, and dividend payments made by Yancoal International.
Staff comments
1. Yancoal International is majority owned by the Yankuang Energy Group Company Ltd., who guaranteed this loan. Yankuang Energy Group Company Limited (formerly known as Yanzhou Coal Mining Company Limited) is a Chinese state-owned company and a subsidiary of Shandong Energy Group Co. 2. In 2011, Yanzhou Coal Mining Company Limited acquired, at a total consideration of USD 260 million, 19 potash mineral exploration permits in the Province of Saskatchewan, Canada through Yancoal Canada. 3. The project is coded as completed, as Yankuang Energy Co., Ltd., the owner of Yancoal International, now owns Yancoal Canada Resources, a potash exploration and development company based in Saskatoon. https://www.yancoal.ca/home