Nickel Industries has executed a new US$450 million syndicated loan facility led by PT Bank Negara Indonesia, replacing maturing debt and extending the company’s refinancing runway to June 2030. The facility comprises a US$350 million term loan and a US$100 million revolving credit line, both unsecured, and will be used to retire the company’s existing US$398 million of bank loans along with general working capital purposes.
The refinancing arrives at a critical juncture for Nickel Industries. The company is ramping up its transformative Excelsior Nickel Cobalt HPAL project, a move that requires capital and operational flexibility. By extending the maturity profile from earlier 2024 dates to mid-2030, the company gains breathing room to ramp nameplate capacity at the ENC project without facing near-term refinancing pressure. The revised amortisation schedule, which begins six months after facility establishment with quarterly payments of 5.875% of principal and a balloon payment at maturity, optimises cash flow timing around ENC ramp-up and reflects management’s confidence in the project’s cash generation.
The pricing structure introduces an incentive mechanism for deleveraging. The initial margin is set at 3.50% above SOFR for the first six months, after which the margin becomes variable based on leverage levels. At leverage ratios above 3.50 times net debt to EBITDA, the margin sits at 4.50%, but it steps down to 2.25% once leverage falls below 2.00x. This structure explicitly rewards balance sheet improvement and aligns the company’s cost of debt with operational progress. Given that SOFR is currently trading around 3.66%, the all-in cost sits in the 6.8% to 8.16% range depending on leverage, competitive for unsecured debt in the current environment.
The facility accommodates the company’s recent strategic decision to provide a loan guarantee to Sphere Corporation, a SpaceX supplier that acquired 10% of the ENC project. Importantly, the contingent obligation associated with this guarantee is carved out for covenant testing, preventing it from mechanically weakening covenant compliance metrics. This carve-out allows the company to support its strategic partner without constraining operational flexibility.
Post-refinancing, Nickel Industries will carry approximately US$994 million of net debt, split between US$800 million of senior unsecured notes expiring in October 2030, the new US$450 million facility, and US$256 million of cash. The company’s leverage profile remains manageable for a commodity producer in a cyclical industry, particularly given that the ENC project should contribute materially to EBITDA as ramp-up progresses through 2026 and 2027.
Investors should monitor the pace of ENC project ramp-up and its impact on EBITDA generation, which will drive leverage ratios and thus future borrowing costs. The maturity wall in 2030 also warrants attention, particularly regarding the US$800 million note maturity and the company’s ability to manage refinancing in that period. The refinancing removes near-term debt maturity risk and provides the flexibility to execute the ENC strategy. This announcement is price sensitive and has been flagged as material by the ASX.
View the full ASX announcement (PDF)
About Nickel Industries Limited (ASX: NIC)
Nickel Industries Limited is an ASX-listed mining company that owns and operates a portfolio of nickel mining and downstream processing assets located primarily in Indonesia. The company produces nickel through high pressure acid leach (HPAL) technology and rotary kiln electric furnace (RKEF) projects, supplying nickel for stainless steel production and the electric vehicle supply chain.
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