Straits Asia to Get $300 Million Loan as Bridge Fund Falls Due

By Jake Lloyd-Smith

Oct. 17 (Bloomberg) -- Straits Asia Resources Ltd., the Singapore-listed coal supplier whose stock has more than halved in the past three months, said it has agreed a $300 million loan to refinance debt due for repayment in December.

Standard Chartered Plc has offered the 18-month funding and is finalizing terms, Straits Asia said today in a statement to the Singapore Stock Exchange. The mining company must repay a $230 million bridging loan on Dec. 17, it said. The surplus funds will be used for development plans, according to the statement.

The global credit crisis has prompted banks to hoard cash, choking off funding to some companies and driving up the cost of borrowing. The freeze has roiled financial markets, brought down banks and threatens to trigger a global recession.

Straits Asia will announce the new loan's terms when documentation is completed, which is expected before the end of this month, the company said. Completion of the lending arrangement is expected by mid-November, it said.

The company's stock gained 2.7 percent to 95 Singapore cents before the market's 12:30 p.m. lunch break, when the loan agreement was announced. Still, the shares have plummeted 78 percent since touching an intraday peak of S$4.31 on Feb. 20.

Straits Asia Resources supplies coal to Japan, Taiwan and South Korea. The company bought stakes in two coal projects from Straits Resources Ltd., its major shareholder, for about $100 million in August.

Standard Chartered, based in London, gets most of its profit from Asia.

To contact the reporter on this story: Jake Lloyd-Smith in Singapore at jlloydsmith@bloomberg.net