The credit facility consists of a $95 million term loan and a $20 million revolving credit commitment. Proceeds from the term loan were used to pay the remaining balance of a promissory note issued to BHP Billiton in 2013 for the purchase of Navajo coal mine and for fees and expenses of the transaction.
“NTEC has secured the Credit Facility on our company’s merit without having to seek the financial backing of the Navajo Nation,” NTEC CEO Clark Moseley said.
“The term loan allows NTEC to continue executing its business plan and the revolving credit commitment will provide financial flexibility in the future.
“NTEC is excited to move forward with its plans for the Navajo Mine and the transition to Bisti Fuels, a subsidiary of North American Coal Corporation, as the new contract mine manager at the end of 2016.”
NTEC Management Committee chairman Steve Gundersen said the closing of this financing on commercially favorable terms without needing the financial backing of the Navajo Nation showed the Navajo Mine was a viable business.
“NTEC has become financially stronger in an industry that has experienced turbulence in recent years,” Gundersen said.
“This financing will allow the company to continue to provide the Navajo Nation and its people a sustainable revenue stream for many years.”
NTEC purchased Navajo Mine in December 2013, making the Navajo Nation the first tribe in the US to take ownership of its mineral resources with its own energy company on this scale.
The Navajo Nation negotiated the purchase price of Navajo Mine with BHP Billiton after it reached an agreement for a coal supply agreement with the owners of the Four Corners Power Plant.