Aditya Birla Minerals, on Monday said it will sell Birla Mt Gordon Pty Ltd, to Lighthouse Minerals Holdings Pty Ltd...
Aditya Birla Minerals, on Monday said it will sell Birla Mt Gordon Pty Ltd, to Lighthouse Minerals Holdings Pty Ltd., in a move that would complete strategic review of the company’s operations, and free up cash of about A$41.7 million.
“Together with the cash proceeds from the sale of BMG, this increase in the Company’s unencumbered cash balance will provide the ABML (Aditya Birla Minerals Ltd) Board with considerable flexibility while it assesses options in relation to capital management and the ongoing strategic review of the balance of the ABML business,” the company said in a statement.
Australian-listed Aditya Birla Minerals is part of Aditya Birla Group, and is 51% owned by Hindalco Industries Ltd. The company focuses on copper production and exploration. It operates Birla Nifty Copper Operation in the Great Sandy Desert, in Western Australia, and ships the concentrates produced at this copper mine to Hindalco-owned copper smelter plant in India.
Birla Mt Gordon Pty Ltd owns Mt. Gordon Copper Operations, while Lighthouse Minerals Holdings, is owned by an affiliate of EMR Capital Resources Fund 1, LP (“EMR”) and Lighthouse Minerals Pty Ltd (“LHM”).
As per the terms of the deal announced on Monday, Lighthouse Mineral Holdings will make a cash payment of $5 million Australian Dollars on completion of the transaction, the company said in a statement. Lighthouse will also make cash payment of another $10 million Australian Dollars if the the three month delivery quoted price of copper on the London Metals Exchange averages at least $4.20 Australian Dollars, over any continuous six-month period, during the period commencing on 12-months after the date of first commercial production at Mt. Gordon, after the acquisition, and ending 36-months after, it said.
Apart from this the buyer will also reimburse Aditya Birla Minerals for actual care and maintenance expenses incurred by it for the operations, between the time of agreement and completion of transaction, the company said. Moreover, Lighthouse will also replace all financial assurance bonds for environmental and performance, amounting to A$41.7 million, it said.
With the transaction, Hindalco Industries Ltd., which owns 51% of Aditya Birla Minerals and off-take counter-party for Mt. Gordon, has also agreed to terminate the existing agreement on completion of transaction, and would sign a new agreement with Lighthouse, the company added.
In case the deal falls through because of material breach, then the defaulting party will pay the other A$1 million as break-up fee.
However, the company will continue to operate the Birla Nifty copper mine and technically review the Birla Maroochydore copper project throughout the strategic review process.