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November 8, 2019updated 10 Nov 2021 4:04am

Glencore and Katanga reach deal on $5.8bn rights issue

Copper and cobalt producer Katanga Mining has announced its plans to raise around C$7.6bn (approximately $5.8bn) under a discounted rights offering with parent organisation Glencore.

Copper and cobalt producer Katanga Mining has announced its plans to raise around C$7.6bn (approximately $5.8bn) under a discounted rights offering with parent organisation Glencore.

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With respects to this rights issue, Katanga has filed a preliminary short form prospectus with securities regulatory authorities in each of the Canadian provinces and territories.

Glencore owns approximately 86.3% of Katanga. It has agreed to swap $5.8bn in debt for equity, which will raise further stake in the firm.

As part of the $5.8bn in debt owed to Glencore, Katanga Mining will repay with approximately $1.5bn residual debt to Glencore.

The residual debt of $1.5bn will remain outstanding until 2023.

As the demand for cobalt is reducing in the market, Katanga noted that its directors had agreed on the recapitalisation of the company.

The debt was scheduled to be paid by 1 January 2021, with recapitalising now expected to be less dilutive provided Katanga’s creditworthiness declines further.

In a press statement, Katanga said: “Upon closing of the rights offering, the Glencore loan facilities will be merged into a single $1.75bn facility consisting of the remaining approximately $1.5bn of Glencore debt not repaid under the rights offering and undrawn committed liquidity of approximately $250m, which Glencore has agreed to provide under a subsequent facility agreement.”

In relation to the recent filing of the preliminary prospectus, Katanga also filed an updated technical report on the material assets of Kamoto Copper Company (KCC).

KCC is the Katanga’s 75% owned operating subsidiary in the Democratic Republic of Congo (DRC).

In January, Glencore tightened its control on Katanga Mining with the appointment of new executives and the signing of a management services contract.

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2022: So far In Venture Capital

Global investment in 2022 has been majorly dominated by North America, Europe, and Asia Pacific, whereas the Middle East, and South and Central America have recorded low investments comparatively. In light of this, Europe and North America have been identified as the major destinations for Private Equity and Venture Capital (PE/VC) investments.   GlobalData’s whitepaper analyzes which sectors PE/VC firms have been investing in, looking at Technology, Media, and Telecom, with these sectors recording $356 billion and a deal volume of over 10,000 deals in 2022. Healthcare, Financial Services, Business & Consumer Services, and Construction sectors have also seen high investment activity by PE/VC firms, recording a deal value of over $70 billion each.   But what can this mean for you?   Understand how the Deals Database on GlobalData Explorer can be leveraged to:  
  • Track the Aggregate Investment Volumes in PE/VC-Stage firms across geographies and sectors, in addition to viewing the specific deals that drove these volumes
  • Identify the top investors already active in any sector-Geography combinations
  • Assess the Performance of Financial and Legal Advisors, supporting the Dealmaking in any segment of choice (Customizable League tables)
  • Understand what is driving the PE/VC fundraising (Deal Rationale)
  Consult our full report here and optimize your business strategy.
by GlobalData
Enter your details here to receive your free Report.

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