Ann: Thunderbird Construction Over 75% Complete, page-27

@Rat_Trader

I hope this is taken in a non-confrontational way as intended:

Based on what you write in the previous post you don't seem to have a full grasp on how the lenders work out the actually amount of debt used.

In simple terms it's based on what the company actually draws down.

As BaliHai pointed out the original budget of $484mil has not changed, and the $27mil extra costs (largely due to accelerated and risk lowering pre production activities I believe) are simply reducing one or several of the buffers in the original $484mil budget.

Those buffers are roughly (working from memory here):

Cost overrun buffer: $40mil
Contingency buffer: $24mil
Pre-Production cost provision buffer: $24mil

thats a total buffer in the $484mil budget of $88mil, and the $27mil reduces this to $61mil which means another $7mil was used up previously leaving existing buffers of $54mil, which equates to 40% buffer of existing uncommitted costs.

So, the lender's don't just assume what is used up, but rather look at the quantum's of funds sent to KMS and allocate those funds to the specific components of the budget and the final debt incurred by KMS is the total of funds drawn to complete the build.

Once the build is completed any remaining available debt drawdown (from the originally agreed total Loan available eg $US150) ceases to be available as it was only approved from specific uses, ie KMS can't use the remaining amount of the loan to make unrelated to the build investments.

In summary if KMS draw US$130mil of a US$150mil loan facility, they end up paying back $130mil plus interest.

Hope this helps clarify on-top of BalHais already clear answer.