Miner Afferro agrees to $190 mln IMIC offer

The IMIC offer is a differently structured deal which allows China to provide the infrastructure as a contractor instead of taking over the company itself and the risks associated with it.

Miner Afferro agrees to $190 mln IMIC offer

World Bulletin/News Desk

West Africa-focused miner Afferro has agreed to a $190 million cash-and-paper offer from investment group IMIC which could pave the way for its flagship iron ore project to be developed.

Under the terms, IMIC will, for each Afferro share, offer 80 pence in cash and a 2-year convertible loan note with a principle value of 40 pence. Afferro shares closed on Tuesday at 70.5 pence.

Shares in Afferro were up 11 percent in early trade, while IMIC stock rose 2 percent.

The bid is IMIC's first major move as the investment company targets resources projects and businesses in Africa.

Projects in West Africa, a recent hotspot for iron ore exploration, have struggled to secure the infrastructure deals necessary to take the projects into full production.

The IMIC offer is a differently structured deal which allows China to provide the infrastructure as a contractor instead of taking over the company itself and the risks associated with it.

Such a structure may sit better with China's more cautious recent approach to investing in projects in Africa.

Afferro chief executive, Luis da Silva told Reuters he expected to have a definite agreement in place within about two weeks.

"After the deal I still see this as the same company going forward just under a different name," he added.

Last Mod: 22 Mayıs 2013, 11:27
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