20th Jun 2016 06:59
LONDON (Alliance News) - Kenmare Resources PLC on Monday said it has made significant process on its planned capital raising and production has remained on track.
Kenmare said it is confident it will be able to deliver its agreed debt restructuring and provide working capital for the business, with all lender approvals now received for its debt restructuring and underwriting of its offering.
The Mozambique-focused miner plans to raise a minimum of USD275.0 million in new equity through a cornerstone placing and a firm placing, a large volume of which will be used to cover its debt restructuring, with the rest to be used for working capital.
The cornerstone investor in the fundraising is the State General Reserve Fund, a sovereign wealth fund of Oman, which had first committed to making a USD100.0 million investment in Kenmare in late 2015.
Kenmare said the maximum funds to be raised through the open offer is USD368.0 million, which would "fully extinguish" its debt pile and provide working capital funds thereafter.
Kenmare said it will conduct the placing in US dollars and will issue shares at USD3.132 per share, reflecting a proposed one-for-200 consolidation it intends to implement as part of the fundraising.
It expects the shares to be issued under its placing and open offer to be admitted to trading in late July or August following an extraordinary general meeting to approve the deal.
Kenmare added three major shareholders in the business have indicated they will participate in the firm placing, including M&G Investments, the investment management arm of blue-chip life insurer Prudential PLC, which plans to retain its current 20% stake in the company.
The group added that in light of positive interest in the fundraising shown by institutional investors, it will terminate its subscription agreement with King Ally Holdings Ltd, a chemicals trading company it had agreed a fundraising with back in late April.
Kenmare added its production and cost guidance remains intact for 2016, while noting that ilmenite markets have now started to tighten.
By Sam Unsted; [email protected]; @SamUAtAlliance
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