Swedish-Canadian miner Boliden (BOL-T) says its lenders have formally approved a refinancing and restructuring deal.
Boliden’s foreign currency hedge counterparts will convert the company’s hedge contracts into debt and, along with the company’s lenders, they will roll about $800 million in outstanding debt into a new loan, which will run for between two and five years. This is conditional upon Boliden’s completion of an agreed new share issue.
The first offering consists of $114 million worth of share rights, directed at the company’s shareholders. The second is a $150-million share offering to shareholders, Swedish institutions and its lenders.
The proceeds from the directed offering will be applied to debt reduction. The net proceeds of the other offering will be used to finance the company’s operations. If shareholders participate fully in the offerings, they will retain an 88% equity interest in Boliden.
Boliden had planned to finalize the deal last week, but a snag was hit when the company flip-flopped on its decision not to sell the Lomas Bayas and Fortuna de Cobre copper projects in Chile to Falconbridge (FL-T).
In mid-May, Boliden reneged on the deal after its financial backers demanded that the company retain the projects as part of a proposed bail-out deal. Subsequently, Noranda (NOR-T) and Falconbridge filed suit in the Ontario Superior Court of Justice, requesting Boliden’s compliance and/or $250 million in damages.
The sale will take place under the original terms — US$175 million in cash, less outstanding third-party debt obligations of US$112.7 million.
Falconbridge will pay the entire amount, plus an additional US$15 million, if it exercises a right to the Fortuna de Cobre copper deposit. In return, it would assume 100% ownership.
The deal, which has yet to be approved by regulators, is expected to close in the coming weeks.
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