Risks Loom as EQ Resources Seeks Extensions on €20m Spanish Debt Guarantees
EQ Resources is progressing the refinancing of its €20 million Spanish debt, securing extensions on Oaktree guarantees while negotiating new financing facilities.
- €20 million Spanish debt due December 2025 and January 2026
- Oaktree Letters of Guarantee to be extended for refinancing period
- Term sheets received and due diligence underway for new facilities
- €3.5 million to be repaid from available cash
- Advanced discussions with Spanish lenders to ensure continuity
Context of the Refinancing
EQ Resources Ltd, a global tungsten producer with operations in Australia and Spain, has provided an update on its efforts to refinance a significant €20 million debt facility tied to its Spanish subsidiary, Saloro Supported and S.L.U. This debt, split between €15 million due in January 2026 and €5 million due in December 2025, is currently backed by Letters of Guarantee from Oaktree Capital Management.
The company is actively negotiating extensions of these guarantees to maintain financial stability while it finalizes new financing arrangements. This approach aims to avoid any disruption in the company’s operations or credit standing as it transitions to new debt facilities.
Progress on New Financing Facilities
EQ Resources has received term sheets proposing refinancing options for the full €20 million Spanish debt. Due diligence is underway to move these proposals towards binding agreements. The refinancing plan includes repaying €3.5 million from the company’s available cash reserves, with the remainder to be covered by new financing.
These developments suggest a proactive approach by EQ Resources to manage its liabilities prudently, balancing cash usage with new capital inflows. The company’s ability to secure favorable terms will be critical to maintaining its growth trajectory and operational momentum, especially given the strategic importance of its Spanish tungsten assets.
Strategic Implications and Market Confidence
Discussions with Spanish lenders are reported to be well advanced, indicating a strong likelihood of securing the necessary extensions and refinancing. This continuity is vital for EQ Resources as it continues to develop its Barruecopardo project in Spain and maintain its flagship Mt Carbine operations in Australia.
Maintaining the support of Oaktree Capital Management through extended guarantees also signals confidence from a major financial partner, which may reassure investors and stakeholders about the company’s financial health and strategic direction.
However, the announcement leaves some details to be clarified, including the exact terms of the new financing facilities and the timeline for finalizing agreements. These factors will be closely watched by the market as indicators of EQ Resources’ financial resilience and capacity to fund its growth ambitions.
Bottom Line?
EQ Resources’ refinancing progress underscores its commitment to financial stability as it navigates critical debt maturities in Spain.
Questions in the middle?
- What are the specific terms and interest rates of the proposed new financing facilities?
- How will the refinancing impact EQ Resources’ liquidity and credit ratings in the near term?
- What contingencies are in place if refinancing negotiations face delays or unfavorable terms?