22nd Sep 2014 07:33
LONDON (Alliance News) - London Mining PLC said Monday it was in dispute with Glencore PLC over a cash prepayment it claims the FTSE 100-listed group has refused to pay and said it was considering its options on the offtake agreement it has with Glencore, including potentially terminating the deal.
Shares of both companies fell early Monday. Glencore shares plunged in opening trade on the back of the news, falling 11% at one point to make it easily the worst performer on the FTSE 100 in opening trade. It later pared back losses to be down 2.6% to 349.40 pence. London Mining shares were down 8.7% in opening trade to 23.75 pence.
London Mining said it still has strong interest in its offtake prepayment financing and has received expressions of interest from a number of parties to reallocated uncommitted offtake and to provide funding to the company should its dispute with Glencore not be resolved. The group said it is in talks with potential strategic partners and was accelerated those discussions.
London Mining said it was in talk with its core lender to secure a short-term replacement liquidity facility.
London Mining also said it has signed a deal with Afreximbank for a USD30 million revolving two-year pre-export financing facility. The deal has credit approval from Afreximbank but does not yet have approval from London's Mining existing lenders.
By Sam Unsted; [email protected]; @SamUAtAlliance
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