predictions tuesday?, page-79

SMH Article:

THE former market darling OZ Minerals held hurried weekend negotiations with its bankers after a crucial debt extension deal was thrown into disarray by a rogue bank in the seven-member consortium to a $US420 million ($640 million) facility.

Late yesterday OZ was still locked in negotiations on the refinancing plan. It still believes it is a "resolvable issue" but was conscious of the fact that it had burnt up most of the weekend without reaching an agreement with the unnamed rogue bank and the rest of the financing syndicate.

OZ thought it had a debt extension deal in the bag early last week but the rogue bank requested a new set of conditions that was delivered to a shocked OZ on Thursday evening, prompting the company to call an emergency board meeting on Friday and request its shares go into a trading halt.

The rogue bank had apparently agreed to the extension being sought by OZ but on terms that the company's board believed would have put it in an untenable situation, as any acceptance of the new conditions would put OZ in breach of existing conditions from its other lenders.

The potential for OZ's end of November refinancing plans to fall over was flagged earlier this year when the group was created by the merger of Oxiana and Zinifex through a bid by Oxiana for Zinifex. Zinifex said in its scheme booklet for the merger that refinancing of the $US420 million facility and a smaller one of $US140 million - held by ANZ and the Royal Bank of Scotland - was planned to be completed by yesterday.

"But there can be no assurance that this will occur within that time frame," Zinifex said in early May.

OZ is seeking an extension until January 31 on the $US420 million loan facility. The extension was technically required by yesterday but for practical purposes by the close of business on Friday.

ANZ and the Royal Bank of Scotland are also members of the seven-member syndicate holding the $US420 million facility.

The pair had previously agreed to an extension of their $US140 million facility, so it is assumed neither are the rogue bank causing the problems with the $US420 million facility.

OZ's debt refinancing woes capped off a bad week for the group.

Early in the week it was forced to disclose that a non-executive director, Owen Hegarty, had dumped 10 million shares on the market after receiving a margin call.

Mr Hegarty was the founder of Oxiana and turned it from a penny dreadful into the group that had the upper hand in the merger with Zinifex.

The combined group, which was named OZ Minerals (for Oxiana and Zinifex) had a $12 billion market value when the merger was announced on March 3. But it is now worth all of $1.7 billion.