Prospect Global to retire $25 million of debt due 2015 at 17% of par

By Susanna Moon

Chicago, Dec. 16 - Prospect Global Resources Inc. said it will retire $25 million of senior secured debt due July 2015 at about 17 cents on the dollar.

The company signed an agreement with a lender with about $148 million of obligations outstanding due July 2015, according to a press release.

The company said it must make principal payments on the debt with 10% of any proceeds raised before maturity.

The company has until March 10, 2014 to raise the capital to extinguish the debt. The senior secured lender will retain its existing royalty after the debt is extinguished and will maintain all of its existing rights related to the debt until extinguishment, the release noted.

"The extinguishment of our senior secured debt will significantly strengthen our balance sheet and position the company for the continued development of our Holbrook Project," Damon Barber, Prospect Global's president and chief executive officer, said in the press release.

"Moving to an all equity capital structure will give us the flexibility to pursue a myriad of financial and strategic options as we continue the development of North America's next potash mine."

Prospect Global is a resource exploration company based in Denver.

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