Yahoo Finance London-Listed Miner Kenmare To Raise £200m
A London-listed miner hurt by the global slump in commodity prices is finalising plans for a financial restructuring that will see it raising as much as seven times its market value in new funding.
Sky News has learnt that Kenmare Resources (LSE: KMR.L - news) , which is also listed in Ireland (Other OTC: IRLD - news) , will announce the ambitious plan on Thursday.
The deal will see the company, which mines titanium minerals including ilmenite at a site in Mozambique, raising about $100m from selling shares to a British Virgin Islands-based trading company.
An identical sum will be raised from Oman's sovereign wealth fund, the SGRF, while a placing to existing shareholders could generate up to a further $100m, according to sources.
A debt-for-equity swap will also be offered to debtholders to form part of the recapitalisation of Kenmare's balance sheet, with the proceeds used to pay down most of its $350 of debt.
The proposed funding package is particularly bold because the slide in Kenmare's share price means it now has a market capitalisation of just over £28m.
The company is among scores of miners which have wrestled with their cost-bases even as mineral prices have rendered their operations uneconomic.
Kenmare rejected a takeover offer from Iluka, an Australian rival, in 2014, with further on-off discussions failing to result in a deal.
The London-listed company's biggest institutional shareholders include M&G Investments, the fund management arm of Prudential (SES: K6S.SI - news) .
Kenmare's largest debtholders, meanwhile, include Absa, Barclays (LSE: BARC.L - news) ' operation in South Africa, and the European Investment Bank.
The miner accounts for 8% of the world's ilmenite production, with the majority of it consumed in China.
A Kenmare spokesman declined to comment.
