Kenmare's $275m equity raise boosts plan to clear debts
Published 01/07/2016 | 02:30
Irish miner Kenmare Resources is on track for a transformational capital raise after securing commitments for $275m (€248m) of equity.
The commitments enable the company to proceed with a debt restructuring programme agreed with its lenders designed to reduce its debt from almost $300m to no more than $100m. The State General Reserve fund of Oman has committed $100m, and M&G - an arm of insurer Prudential - is also taking part out of a desire to preserve its stake in Kenmare at just under 20pc.
On top of the $275m, the company hopes to raise as much as $122.7m via an open offer available to existing shareholders, which if fully subscribed to would wipe out Kenmare's debt entirely.
"The Capital Raise and Capital Restructuring provides Kenmare with an excellent platform to deliver strong returns to its shareholders," Kenmare managing director Michael Carvill said.
"The strengthening of the balance sheet, allied to falling cash costs and vastly increased power stability, allows Kenmare to benefit from the strong improvement in the titanium feedstock market we are currently experiencing," he added.
The plan also provides the company with $75m for working capital and covering existing expenses.
Shareholders will vote on the plan next month.
The deal gives Kenmare a path forward after Australian company Iluka decided not to proceed with a takeover offer last year.
The Irish company announced in December it would embark on a capital raise to "provide a sustainable platform for future operations, with an enhanced working capital position".