Why Lynas Corporation Ltd gained slight momentum?

Repayment of JARE senior loan facility: Lynas Corporation Ltd (ASX: LYC) edged higher on June 28, 2018 after the company made a voluntary early repayment under the JARE senior loan facility. The company has repaid the principal amount of US$20 million. As per the JARE senior loan facility, LYC can make early principal repayments at any time without penalty or break costs. Both of the company’s loan facilities are “interest only” facilities, and no fixed principal repayments due until maturity. Moreover, under the JARE facility, on each 30 June and 31 December, when the total unrestricted cash balance exceeds A$40m, the surplus is paid as a principal repayment to JARE pursuant to a cash sweep mechanism. If LYC gets the proceeds from an equity raising (such as an issuance of shares or an exercise of warrants), then the following amounts are exempt from the cash sweep: (i) 75% of the proceeds received up to a cumulative balance of US$50m, and (ii) 50% of the proceeds above a cumulative balance of US$50m. Meanwhile, LYC is on track to achieve its Lynas NEXT targets of 500 tonnes/month of NdPr from April 2018, and 600 tonnes/month of NdPr from January 2019. Meanwhile, LYC stock has fallen 7.87% in three months as on June 27, 2018  and is trading at a P/E of 23.42x.

lynas corp.pngLynas’ loan facilities after Early Principal Repayment (Source: Company Reports)


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