WRIGHT LEGAL WINS 'DEBT DEAL OF THE YEAR 2020' FOR SARACEN 'SUPER PIT' ACQUISITION FINANCE

Trish Chapman and the team at Wright Legal were named Winners of the Debt Market Deal of the Year in the Australasian Law Awards 2020 for Saracen Mineral Holdings debt acquisition facility funding the 50% 'Super Pit' acquisition from Barrick Gold Corporation.

The Saracen Super Pit acquisition was one of the highest profile debt transactions in Australia in 2019, with the debt facility being an essential part of the funding needed by the company for the transaction. The transaction was significant at an A$1.1 billion purchase price for the 50% interest being acquired.

The Kalgoorlie Super Pit is iconic, being one of the largest gold mines in Australia. The acquisition was transformational for Saracen Mineral Holdings Ltd, helping establish Saracen as one of Australia’s largest gold producers, adding to its two other operational mines.

The transaction had its challenges that are not unusual to a competitive bid process for an acquisition. The time frame was extraordinarily tight. Trish was able to assist Saracen to achieve a fully credit approved facility from first contact on 15 October 2019 to the signed bank mandate, commitment documents for bid submission to Barrick on 14 November 2019. The share sale agreement (with the only condition precedent being a Ministerial consent) signed on 16 November with full form loan documentation signed on 26 November 2019 and achieving completion on 29 November 2019.

Barrick's competitive bid process required the bid to be fully funded and all significant conditions precedent with the banks had to be completed by bid submission (including all due diligence) so that the bid was made with the financing being almost entirely unconditional (with only administrative CPs remaining and a 'certain funds' approach to general CPs).

Saracen secured an A$450m term facility (ultimately only needing to draw $400m) plus a $45m revolving facility and $5m bank guarantee facility. The favourable terms secured for the Borrower for the debt facilities reflected the highly competitive process and the calabre of Saracen as a company and its senior management, and its projects both the Super Pit and its two existing projects.

With the purchase price in USD and the facilities drawn in AUD, FX transactions with the 3 lenders were also required to be agreed and managed (and with timing and process also needing to navigate around the Thanksgiving bank holiday in the US the day before closing).

Despite the tight time frame, significance of the deal and complexities, it is testament to the deep expertise of Wright Legal, and the trust developed between Wright Legal and the Saracen team working closely to ensure this high profile transaction worth over $1bn to the company was successful. The Wright Legal team worked alongside Saracen’s tax, accounting and corporate advisors PwC, RBC Capital Markets, Goldman Sachs Australia and Noah's Rule - to ensure a successful transaction. Herbert Smith Freehills Perth (led by partner Andrew McLean) acted for the lenders.

Banking and finance law is a particularly specialised area, especially when it comes to large scale projects, international ventures, mergers and acquisitions, property and resources development, construction and energy project funding.

Wright Legal's team of banking and finance lawyers are specifically dedicated to banking and finance transactions and recognised for outstanding work through Best Lawyers Awards, Doyles Listings, Lawyers Weekly and the Australasian Law Awards.

Don't hesitate to contact Wright Legal for advice about your banking and finance transactions.