Kagara Zinc is expected to announce a near $200 million capital raising and plans for a Chinese investment firm to become its largest shareholder when it emerges from a trading halt.
The cashed-strapped copper and zinc miner is reported to be undertaking a placement and rights issue underwritten by a Chinese firm, believed to not be a mining company, to extinguish more than half its debt and provide working capital.
The Chinese entity is set to take a 19.9 per cent stake in Kagara.
The raising could be completed at 40 to 50 cents per share, a heavy discount to its last trading price of $1.185, according to reports.
Kagara had $2.7 million cash on hand at the end of March and said at the time it was ``reviewing several options in order to reduce the current level of bank debt in place and is working towards implementing a debt reduction strategy during the June 2009 quarter''.
The company had drawn down almost all of its $150 million debt facilities with National Australia Bank (NAB) at March 31.
It also recently rolled a $50 million debt facility with Westpac Banking Corporation to October 31 to match the NAB facility maturity date.
Kagara also owes nickel miner Western Areas NL $20 million for capital costs incurred developing a decline at Western Areas' Flying Fox mine, south of Southern Cross in Western Australia, to access Kagara's Lounge Lizard nickel deposit.
Kagara's shares were placed in a trading halt on Friday, suspended from official quotation on Wednesday and are expected to resume trading as early as today
Source: Sydney Morning Herald
No comments:
Post a Comment