Harry Winston Gets $640 Million in Loans for Ekati Diamond Mine
Harry Winston Diamond Corp., whose jewels have been worn by Hollywood celebrities including Marilyn Monroe and Angelina Jolie, obtained $640 million in loans to support its purchase of BHP Billiton Ltd. (BHP)’s stake in the Ekati Diamond Mine.
Royal Bank of Canada and Standard Chartered Bank are arranging the financing, which includes a $400 million term loan and a $100 million revolving line of credit, both due in five years, and a $140 million letter of credit facility expiring in 364 days, the Toronto-based diamond miner and retailer of fine jewelry said today in a statement.
Harry Winston is paying $500 million for Melbourne-based BHP’s interests in the Ekati mine as well as its marketing operations for the precious stones. The sale is expected to be completed in the first quarter of next year. BHP company owns 80 percent of the mine, 200 kilometers (124 miles) south of the Arctic Circle in Canada’s Northwest Territories.
Ekati has produced more than $750 million of rough diamonds annually for the past five years, about 6 percent of world supply by value, according to Harry Winston. The operation is Canada’s first and largest diamond-producing mine and Harry Winston’s acquisition comes one year after BHP said it was studying the sale of all or some of the unit.
The sale as well as the divestment of other smaller assets “reflects our ongoing pursuit of a simpler business,” BHP’s Andrew Mackenzie, chief executive of non-ferrous, said in a statement.
In a revolving line of credit, money can be borrowed again once it’s repaid; in a term loan it can’t.
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