Roy Hill partners forced to stump up $624 million
The extra payments were described in Roy Hill's annual results, which were published by ASIC over the past 24 hours.
The big iron ore project, which is being developed by Mrs Rinehart in partnership with Korean steel giant Posco, Japan's Marubeni and China Steel Corporation, had originally hoped to have its $US7-billion debt package secured by March.
But that process is still under way, meaning the joint venture partners were asked to pay further instalments on their stakes sooner rather than later. "The directors resolved that further calls on partly paid shares be made sufficient to meet existing current commitments in order to progress project activities," the company said in its full year results. "In the quarter ended September 30, 2013, call notices totalling $624,000,000 were made and paid by shareholders."
Mrs Rinehart's main company, Hancock Prospecting, will own 70 per cent of the project. The Roy Hill debt package is expected to include $US3 billion from commercial banks and the organisation does much of its banking with NAB.
A further $US4 billion is expected to be supplied by the export credit agencies of nations such as South Korea, the US and Japan. Roy Hill reiterated that securing the debt package was central to the project taking the next step.
"The group intends to continue its principal activities as set out above during the year, with any change dependent [among other factors] on the progress of the debt capital raising," the company said.
The debt is planned to be finalised before Christmas and first ore shipped before the end of 2015.
JPMorgan recently predicted that Roy Hill would go ahead, but with a minimum six-month delay.
"A debt package of that order of magnitude may be difficult to secure without a further potential sell-down of the project," it said in a research note.
Mining companies often record several years of losses before they come into production, and Roy Hill has proved no different, reporting a loss of $315 million for the year to June 30, 2013.
Hancock Prospecting, is a significant shareholder in Fairfax Media, the owner of this newspaper.
Frequently Asked Questions about this Article…
Roy Hill shareholders contributed an additional $624 million to keep the project moving forward while waiting for debt funding to be secured. This was necessary to meet existing commitments and progress project activities.
Roy Hill shareholders contributed an additional $624 million to keep the project moving forward while they work on securing debt funding. This was necessary to meet current commitments and progress project activities.
The Roy Hill project is being developed in partnership with Gina Rinehart's Hancock Prospecting, Korean steel giant Posco, Japan's Marubeni, and China Steel Corporation.
The main partners in the Roy Hill project include Gina Rinehart's Hancock Prospecting, which owns 70% of the project, along with Korean steel giant Posco, Japan's Marubeni, and China Steel Corporation.
The $US7-billion debt package is crucial for the Roy Hill project as it will provide the necessary funding to advance the project. Securing this debt is central to taking the next steps in development.
The Roy Hill debt package, originally expected to be secured by March, is still in progress. It is anticipated to include $US3 billion from commercial banks and $US4 billion from export credit agencies of countries like South Korea, the US, and Japan.
The Roy Hill debt package is planned to be finalized before Christmas, with the first ore shipment expected before the end of 2015.
The Roy Hill project aims to finalize its debt package before Christmas and plans to start shipping its first ore before the end of 2015.
Securing a debt package of this magnitude may be challenging without a potential sell-down of the project, as noted by JPMorgan in a research note.
Securing a debt package of the required magnitude may be challenging without a potential further sell-down of the project, as noted by JPMorgan in a research note.
Hancock Prospecting, Gina Rinehart's main company, owns 70% of the Roy Hill project.
No, like many mining companies, Roy Hill has reported losses before coming into production. It recorded a loss of $315 million for the year ending June 30, 2013.
Roy Hill reported a loss of $315 million for the year ending June 30, 2013, which is common for mining companies before they begin production.
Hancock Prospecting, owned by Gina Rinehart, is the main company behind the Roy Hill project, holding a 70% stake and playing a significant role in its development.
Export credit agencies from countries like South Korea, the US, and Japan are expected to supply $US4 billion as part of the Roy Hill project's debt package.
The future plans for the Roy Hill project include continuing its principal activities, with any changes dependent on the progress of debt capital raising. The project aims to finalize its debt package and begin ore shipments by the end of 2015.
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