Australia ยท Mining services
A contractor won a multi year site services contract that required a larger fleet of heavy plant than it currently owned or leased.
The new contract had a firm mobilisation date. Buying the required plant outright would have used most of the company's cash reserves, leaving no buffer for the contract's ramp up costs.
Existing lenders were cautious about further exposure to the mining services sector given recent volatility in commodity prices, despite the contract itself being with an investment grade operator.
We built the case around the underlying contract rather than the sector, emphasising the creditworthiness of the site operator and the multi year term of the agreement.
Two equipment finance specialists with mining sector books were approached, along with the plant supplier's own finance arm, which ultimately offered the more competitive terms once shown the contract detail.
An AUD 7m equipment facility was agreed, matched in term to the length of the site contract.
The fleet was delivered ahead of the mobilisation date, and the company kept its cash reserves intact for the ramp up period.
Details are anonymised. Figures are rounded and identifying information is removed or altered to protect client confidentiality. Past transactions are not a guarantee of future outcomes.
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