The China Investment Corporation (CIC) has taken a minority interest in Canadian diversified miner Teck Resources.
State-owned CIC has agreed to purchase 101.3 million Class B subordinate voting shares of Teck to gain a 17.2% equity and 6.7% voting interest in the company.
The private placement at C$17.21 a share will be used to reduce outstanding bank debt, Teck said.
The transaction will improve Teck’s balance sheet, Teck president and CEO Don Lindsay said.
“This transaction will have an immediate and very positive effect on Teck’s balance sheet, and represents an attractive opportunity for Teck to establish a relationship with a major Chinese financial investor, with a deep understanding of China, the world’s largest consumer of our principal products,” Lindsay said.
The transaction, subject to regulatory approval, is expected to close around 14 July 2009.