Pacific Lime secures A$50m backing as DFC advances PNG industrial platform

A$50 million placement funds the next construction phase

Pacific Lime and Cement Limited (ASX:PLA; PNGX:PLC) has secured the immediate capital it needs to push its Kido/Rearea industrial platform forward, with firm commitments for a A$50 million placement. The issue price of A$0.36 per CDI is a 5.3% discount to the last closing price and a 3.6% discount to the five-day VWAP, while the 138.9 million new CDIs will increase the existing share count by approximately 14.9%.

The placement is not simply a corporate cash buffer. PLC plans to direct A$27 million, or 54% of the proceeds, towards SEZ precinct and port expansion work, tenant and strategic-partner engagement, a global expression of interest for industrial users, land subdivision and port design. A further A$10 million is earmarked for Central Cement Project early works and pre-FID costs, with A$10.8 million allocated to corporate costs, DFC transaction work and general working capital.

DFC term sheet adds a conditional financing pathway

Alongside the equity raising, PLC has signed a non-binding term sheet with the United States International Development Finance Corporation for a proposed US$15 million senior unsecured convertible note. The note would run for eight years and carry interest of 8% a year, payable in cash or capitalised at PLC’s election. DFC would be able to convert at A$0.42 per CDI, a 15% premium to the 20-day VWAP cited in the announcement, subject to a 29.99% ownership cap.

The proposed note would fund pre-development work across the lime, cement and international port projects, including environmental and social impact assessments, engineering and project preparation. It would also give DFC a right of first refusal over future financing for those facilities. That is a potentially important financing relationship, but it is not a commitment to provide the much larger project-level funding PLC may require: the company has described future debt requirements of up to US$400 million as indicative only.

Lime production and cement decision remain the near-term tests

PLC says construction of the Central Lime Project will continue, with first production still targeted for late Q1 to Q2 CY2027. The project recently moved into its equipment installation phase, after more than half of its major kiln and process plant materials had been delivered, according to the Central Lime equipment installation update. The new placement is intended to support the remaining construction effort while the company develops the broader precinct.

Central Cement is also being pushed towards a final investment decision targeted for the first quarter of calendar 2027, with pre-construction and early works scheduled to begin this quarter. PLC is simultaneously targeting a final investment decision for the expanded international nine-berth port in the same quarter, although capital cost estimates and the funding plan are still being finalised. First binding agreements with precinct tenants are targeted for the fourth quarter of 2026.

Definitive DFC documents remain the key financing hurdle

The DFC arrangement is still at the conditional stage. It requires due diligence, internal management and board approvals, ASX in-principle advice on the note terms, sufficient placement capacity, environmental and social requirements and definitive documentation. PLC has granted DFC 60 days of exclusivity to complete due diligence and negotiate those documents, while any future project financing would require separate approvals, project FIDs and financing agreements.