Boliden bows to legal pressure

Citing uncertainties associated with a lawsuit brought forth by Falconbridge (FL-T) and Noranda (NOR-T), Boliden (BOL-T) has decided to sell those companies its adjoining Lomas Bayas and Fortuna de Cobre copper projects after all.

In mid-May, Boliden renegged on the deal after its financial backers demanded it retain the Chilean assests as part of a proposed restructuring. The miner had agreed to issue US$251 million in new capital to retire much of its corporate debt and then refinance the rest to reflect its newfound financial strength (T.N.M., May 28/01).

Subsequently, Noranda and Falconbridge filed suit in the Ontario Superior Court of Justice, requesting Boliden’s compliance and/or $250 million in damages. The lawsuit has since been withdrawn.

The sale will take place under the original terms, that is, US$175 million in cash, less outstanding third-party debt obligations totalling US$112.7 million. Falconbridge will, in fact, 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 assumes 100% ownership.

The deal, which has yet to be approved by regulators, is expected to close in the coming weeks.

As for Boliden’s restructuring effort, the company says it has received most of the necessary approvals. The remaining ones are expected shortly.

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