Hargreaves to bear £400,000 cost in order to refinance

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MALTBY colliery owner Hargreaves Services has refinanced its core UK banking facilities, increasing them from £115m to £175m.

The new facilities include a £125m revolving credit facility and a £50m invoice finance facility.

The arrangement has been drawn up with five banks; RBS, HSBC, Lloyds, Santander and Barclays, and is committed through to October 2015.

Hargreaves said the decision to secure new facilities early will result in a £400,000 exceptional charge in the current financial year to write off unamortised arrangement fees.

On the upside, it said the new facilities will provide certainty, lock in slightly improved pricing and provide the group with increased debt capacity to support its growth aspirations. Hargreaves also announced that its joint venture, Tower Regeneration, has agreed banking terms in line with its business plan.

These include working capital facilities of £10.5m and asset financing credit lines of £32m and are expected to be completed this week.

The group added that coal shipments from the Tower site to the Aberthaw Power station have begun ahead of schedule, even though the site is still is in its early development phase.

All site development activities are expected to be complete by the end of May.

Earlier this year Hargreaves said Maltby Colliery’s coal targets will fall by 100,000 tonnes this year due to a thin coal seam, but work on a much more productive seam will start in October, boosting future revenues.