Jinchuan takeover of Metorex progressing well
04 OCTOBER, 2011 14:47
At a time when many large takeovers fall by the wayside, Jinchuan's R9.1 billion takeover of SA-based copper and cobalt miner Metorex is proceeding surprisingly smoothly.
The companies on Tuesday said that just three conditions precedent remain outstanding, which means the deal is on track to be finalised next month.
Jinchuan, a Chinese mining and refining group, in July won over Metorex after trumping a previous offer by Brazilian giant Vale.
Vale offered to buy Metorex for R7.35 a share in a deal that then valued the local company at about R7.5 billion while Jinchuan bid R8.90 a share - 21% more than Vale.
The Brazilian group backed away from the deal by refusing to sweeten its offer.
Metorex's board recommended the Jinchuan offer to shareholders soon after the termination of the implementation agreement with Vale and agreeing to pay a R75.2 million break fee.
Shareholders approved the offer last month.
Last month also saw the transaction receive the blessing of the South African Competition Commission and the Zambian Competition and Consumer Protection Commission.
Since then ZCCM Investments Holdings has agreed to waive its rights to sell its shares in Chibuluma to Metorex pursuant to Metorex's obligation in terms of applicable laws and regulations to make a mandatory offer to the minority shareholders of Chibuluma and Gecamines has waived all its rights to require Ruashi Holdings to offer its shares in Ruashi Mining for sale to Gecamines.Metorex has also received waivers from all lenders over any change of control rights that they may otherwise have had.
This leaves three move steps to the conclusion of the deal. These include consent of the Zambian Ministry of Finance to change control of Metorex and waiver any rights to sell its special share; the obtaining of an exemption from the Zambian Securities and Exchange Commission from the obligation to make a mandatory offer to ZCCM Investments Holdings and the Zambian Ministry of Finance; and securing consents from the People's Republic of China.
With regard to the Chinese governmental consents, Jinchuan reported that good progress has been made with respect to applying for the required approvals and consents from the relevant authorities.
"Application documentation has been formally accepted by the relevant PRC authorities, and Jinchuan advises that it believes the process is progressing well and anticipates receiving the relevant approvals and consents in due course," said Metorex.
If all goes according to plan, Metorex could be delisted from the JSE before the end of the year.
Metorex CEO Terence Goodlace said last month that the transaction was an opportunity for the company to grow "further and quicker".
On Monday Metorex reported that its copper production increased by 15% quarter-on-quarter to 15,202 tons in the three months making up the September quarter from 13,218 tons in the three months to end June. Cobalt production rose by 11% to 942 tons from 849 tons in the June quarter.