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, which is also listed in Ireland, 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.
Kenmare’s largest debtholders, meanwhile, include Absa, Barclays’ 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.
Source: Manx Radio