Nickel Industries Limited (ASX: NIC) has arranged US$450 million in new unsecured syndicated loan facilities, led by PT Bank Negara Indonesia.
The package comprises a US$350 million term loan and a US$100 million revolving facility, which will refinance US$398 million of existing debt and provide additional working capital as the company increases its focus on the electric vehicle (EV) battery supply chain.
Under the new facilities, the interest margin is initially set at 3.50% above the Secured Overnight Financing Rate (SOFR), before moving to a leverage-based grid where the margin ranges between 2.25% and 4.50% depending on the company’s net debt-to-EBITDA ratio.
This pricing structure is tied to credit metrics and aligns with Nickel Industries’ ongoing shift from stainless steel grade nickel pig iron towards battery-related products.
A revised quarterly amortisation profile runs through to June 2030, matching the planned production ramp-up at the Excelsior Nickel Cobalt (ENC) HPAL project.
The package also accommodates a recently announced loan guarantee for Sphere Corporation, a supplier to SpaceX and a 10% shareholder in ENC.
Upon completion of the refinancing, Nickel Industries is expected to hold cash of US$256 million and net debt of about US$994 million.
Executive management said the margin schedule reflects the continued strengthening of Nickel Industries’ diverse operations and is intended to incentivise lower leverage, whilst maintaining flexibility to operate in a cyclical industry.