Sterling Raises $225 Mln Through Bond Issue (UK)

Sterling Resources Ltd. has announced the successful placing of the USD 225 million senior secured bond issue (the “Bond”) issued by its UK subsidiary Sterling Resources (UK) Ltd (the “Issuer”).

The net proceeds of USD 218.6 million from the Bond will be used (i) to prepay the entire senior secured credit facility with a group of lending banks (approximately USD 140 million), (ii) towards funding ongoing development costs of the Breagh field, including development of the eastern portion of the field (Phase 2), (iii) to prefund the first interest payment due October 2013, and (iv) for general corporate purposes (USD 20 million). The Bond has a wide-ranging security package including a charge over the Issuer’s interest in the Breagh and Cladhan fields and the shares of the Issuer, as well as a parent company guarantee.

As part of the Bond, the Issuer has undertaken to complete the Cladhan farm-down transaction with TAQA Bratani Limited, as further described in the Company’s press release dated April 8, 2013.

Commenting on the successful placing of the Bond, Mike Azancot, Sterling’s President and CEO, said: “Following on from our equity raise completed earlier this year, the proceeds from the Bond and the Cladhan farm-down leaves Sterling as a soundly-financed company. The Bond enables us to fully refinance our senior secured credit facility and provides sufficient additional capital to fund future expenditures for Breagh. In addition, the Bond provides the Company with accelerated access to Breagh cashflow, allowing us to continue our strategy in a financially disciplined manner. We now look forward to achieving first production on Breagh during August 2013, which will be a further transformational milestone for the Company.”

Press Release, April 17, 2013

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