Development Of The Ranger Uranium Financing From Banks, Customers, Shareholders, And The Stock Market

Construction of the Ranger uranium project, located 230 kms east of Darwin in the Northern Territory, Australia, commenced in January 1979. Energy Resources of Australia Ltd (ERA) was incorporated in February 1980 to acquire all the rights in the project. The total cost to ERA of these rights was A$407 million, made up of A$125 million in cash to the Federal Government and the issue of 125 million A$1.00 shares at par, plus a payment of A$16 million in cash to each of Peko-Wallsend Ltd. (Peko) and EZ Industries Ltd. (EZ). ERA's cash requirements to complete the project were estimated in October 1980 to be A$553 million. Project loans, secured by first ranking debenture stock, were arranged for a total of US$390 million, while second-ranking debenture loans totalling A$60 million were [ ] obtained from the vendors, Peko and EZ. Overseas participants (power utilities who had agreed to purchase uranium yellowcake under contract) arranged to take up 25% of the equity capital for A$102.5 million; Peko and EZ were allotted 30.5% each as satisfaction of vendors' consideration; and 14% representing A$57.5 million was issued to Australian residents in an underwritten public flotation in November, 1980. The loan and equity financing arrangements required the successful resolution of many complex and interlocking factors, including technical and economic feasibility, agreement with Aboriginal interests, compliance with Government policies, and securing of sales contracts.