2nd Oct 2013 06:35
OTTAWA (Alliance News) - Hochschild Mining plc (HOC.L) has inked a binding deal to acquire the 40% interests held by International Mineral Corp. or IMZ in the Pallancata mine and Inmaculada Advanced Project in Peru. The transaction would be executed by way of a court-approved Plan of Arrangement under the Business Corporations Act (Yukon). Earlier to the purchase, Hochschild holds a 60% stake in the Peruvian Assets.
Pertaining to this, each IMZ shareholder, other than Hochschild or its affiliates, would receive a cash payment of $2.38 per IMZ share for aggregate cash consideration of $271 million, and each IMZ shareholder, including Hochschild or its affiliates, would get one common share of a newly incorporated British Columbia, Canada company "SpinCo" per share. As part of the acquisition, Hochschild would buy the Peruvian Assets for nearly $280 million, considering the $271 million cash payment, the undisturbed market value of Hochschild's existing 3.2% stake in IMZ, and the 3.2% interest in SpinCo which Hochschild would retain.
As the first stage of a broader corporate refinancing initiative, Hochschild has raised commitments for a $340 million acquisition bridge financing facility; and is undertaking an equity placing to institutional investors, including Eduardo Hochschild, of between 4.99% - 9.99% of Hochschild's outstanding share capital, representing about $48 million - $96 million.
Assuming all conditions are satisfied or waived, the acquisition is expected to close by the end of fourth quarter of 2013. Hochschild expects the acquisition to be earnings enhancing in the first full year of ownership.
Separately, Hochschild said it intends to place between 16.905 million and 33.81 million new ordinary shares of 25 pence each to raise around $48 million - $96 million of proceeds. The firm plans to use the proceeds to partially fund the acquisition of the 40% stake held by IMZ in the Pallancata mine and Inmaculada project.
Copyright RTT News/dpa-AFX
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