Greenstone Equity Partners (“Greenstone”), a Dubai based investment and advisory firm, has advised Tri-Star Resources Plc (AIM: TSTR) (“Tri-Star”) on the establishment of a joint venture company, Strategic & Precious Metals Processing LLC(“SPMP”), which will construct and operate a 20,000 tonne per annum nameplate capacity antimony metal and tri-oxide manufacturing roasting facility in Oman (the “Roaster Project”). Tri-Star has entered into a shareholders agreement with the Oman Investment Fund (“OIF”) and Castell Investments Ltd (“Castell”). Greenstone was successful in sourcing the equity capital and is also advising SPMP on the debt financing required for the Roaster Project.
Commenting on the memorialization of the Shareholders Agreement, Alex Gemici, Chief Executive Officer of Greenstone said:
“We are proud to have aided the closing of a transaction which is not only positioned to provide attractive returns for its shareholders but also to contribute significantly to local job creation and economic output in Oman. Greenstone shares the vision of investors such as the Oman Investment Fund of promoting the local economies of the GCC and establishing profitable companies and joint-ventures to fosterthe long-term development of local industries.”
SPMP will be incorporated in the Sohar Free Trade Zone (“Sohar FTZ”) in Oman. The Sohar FTZ is being developed into a major regional and international hub for the downstream processing of metals and minerals. It is served with excellent logistical nodes, including its close proximity to the Port of Sohar, and low energy costs.
The Roaster Projectremains subject to certain conditions including securing banking finance and obtaining the necessary permits to operate the Roaster including environmental approvals.
Under the Shareholders Agreement, the shareholderswill own and control SPMPin the ratio 40% by Tri-Star Resources, 40% by OIF and 20% by Castell (the “Joint Venture Parties”).
The funding structure is expected to includeat least US$30million of project finance to be raised by Greenstone from local and regional banks. Greenstone has already engaged with a number of banks in Oman and indicative loan financing terms have been received which are currently under review.
The balance of the capital cost of US$30millionto US$40 million is expected to include a mezzanine loan of US$10million from OIF with the balance to be provided as equity by the Joint Venture Parties over the construction phase of the project.
The Joint Venture Parties are progressing towards completing the final approvals and financing package so that site preparation work and construction can commence during 2014. Construction is expected to take up to 18 months,including commissioning. Operations are expected to commencein 2016.
Commenting on the strategic value of the venture, Omar Al-Gharabally, Managing Director & Partner of Greenstone said:
“We are pleased to be the sole and exclusive advisor to this pioneering local transaction. We have maintained strong relations with OIF for some time and it was clear that with their recent shift in investment policy to focus on domestic growth that this investment opportunity would hold strategic value to OIF and the Sultanate. We are currently engaged on several follow-on transactions with the goal to create an eco-system of industrial projects which will add value and help build a diversified economy, supported and underpinned by strong fundamentals.”