From the AFR
Varde Partners bankrolls ‘mini-Min Res’ mining services, gold play
Sarah Thompson, Anthony Macdonald and Tim Boyd
May 3, 2021
ShareDistressed debt bigwig Varde Partners is trying to bang together two resources plays to create what it hopes could look like the next Mineral Resources.
Street Talk understands Varde Partners refinanced all of the lenders out of Mark Rowsthorn’s Rivet Group last week, to take control of the company’s $300 million debt stack. Mark Rowsthorn is the executive chairman of the Rivet Group, which includes SMS Mining. The refinancing saw it repay loans to the likes of fellow US firm Anchorage Capital Group, which was a mezzanine lender, and senior lenders Deutsche Bank, Bank of America and IFM Investors. At the same time, it bought Asia funds Tor Investment Management and SC Lowy out of Adaman Resources, a gold miner also backed by Rowsthorn.
The play, sources said, is to create a diversified mining services and mining group - a smaller version of $9 billion tearaway Mineral Resources, whose shares only know one way at the moment. Rivet is a specialised transport and logistics, contract mining, equipment hire and maintenance and aviation services business run by former Asciano Ltd managing director Rowsthorn and SMS Mining Services founding director Daniel Sweeney. Adaman is backed by Rivet and the Mitchell Group and has two gold projects in Western Australia. (Interestingly, Adaman went into voluntary administration on Monday),Varde taking out the debt stack makes it possible to formally stitch the pair together.
Rivet last fronted banks for funds in late 2019, when Deutsche Bank helped it secure a $150 million debt refinancing.Where the latest deal could get really interesting is if Varde Partners tries to bring in another of its Australian investments; the former KKR owned minesite trucking business Bis Industries, where it led a debt-for-equity recapitalisation in 2018. There’s no sign that’s on the cards, for now.
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