Mining group Nikanor Plc said on Friday it had raised 400 million pounds ($791.1 million) via a share placing, with Swiss commodities trader Glencore International taking an around 12.5 percent stake in the enlarged group.
Nikanor which has a major copper and cobalt mine in the Democratic Republic of Congo (DRC) said it placed 67 million new shares at the discounted price of 600 pence each.
It plans to use the cash to develop the mine after announcing in March the costs of developing the mine had spiralled and talks with a potential Chinese financial backer collapsed. A Glencore-led consortium had a 600 pence-a-share indicative cash proposal for Nikanor rejected last month, but a spokesman for the group said it had dropped its plans for a full bid in order to take part in the placing. Nikanor said Glencore was set to take 25 million shares from the placing giving it around a 12.5 percent stake in the enlarged group, while fund manager RP Capital also part of the bidding consortium will take a further 25 million.
RP Capital said it was controlling its stake on behalf of a special purpose vehicle called Ruwenzori, in which the main shareholder is a discretionary trust in which Nikanor founding shareholder Dan Gertler has an interest.
The fund raising will bring the total amount raised by Nikanor to over $1.1 billion in less than a year, following the $400 million it raised in its 2006 IPO one of the biggest on London junior market AIM last year. It said at the time it would look to raise up to $1.6 billion in debt and equity to continue the development, but later said it had received a preliminary approach for the group.
Nikanor said it had also agreed a deal with Glencore for the Swiss firm to take the entire copper and cobalt output of the project at market prices when production begins in a few years time. "This underpins the commercial case for the mine," a spokesman said.
Sources in the cobalt market said the move was typical of Glencore. "If you look at history, they take a chunk and they tend to get marketing agreements, such as at Murrin, Mopani and of course Xstrata," a cobalt analyst said, referring to miners in which Glencore owns a stake.
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