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CIC to take a 17% stake in Canadian mining company
Source: Agencies |
July 6, 2009, Monday
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Print Edition
Print Edition
CANADIAN mining company Teck Resources Ltd is selling a 17-percent stake to China Investment Corp for C$1.74 billion (US$1.5 billion) in a bid to reduce its debt.
The Vancouver-based company said CIC, the world's largest commodity buyer, will buy 101.3 million class B voting shares for C$17.21 each. CIC will hold onto the stock for at least a year, said the mining company.
The proceeds from the private placement will go toward paying down nearly US$10 billion in bank debt and will also give the company a chance to forge a partnership with a major foreign investor, said Teck's Chief Executive Don Lindsay.
"We will have a financial relationship with a very deep-pocketed investor who would potentially participate in future development projects," Lindsay said.
The sale, which is still subject to regulatory approval, is due to close on July 14.
Teck has been selling assets and cutting costs to pay down the debt acquired after the US$9.8-billion purchase of Fording Canadian Coal Trust last year.
China has been pursuing major acquisitions or investments in commodity companies.
Last week, China's Sinopec announced it was to acquire oil explorer Addax Petroleum for US$7.2 billion, in what would be the largest overseas takeover yet by a Chinese company.
Sinopec, a refiner, would gain access to substantial reserves in west Africa and the Middle East if the takeover of Addax is approved.
The Vancouver-based company said CIC, the world's largest commodity buyer, will buy 101.3 million class B voting shares for C$17.21 each. CIC will hold onto the stock for at least a year, said the mining company.
The proceeds from the private placement will go toward paying down nearly US$10 billion in bank debt and will also give the company a chance to forge a partnership with a major foreign investor, said Teck's Chief Executive Don Lindsay.
"We will have a financial relationship with a very deep-pocketed investor who would potentially participate in future development projects," Lindsay said.
The sale, which is still subject to regulatory approval, is due to close on July 14.
Teck has been selling assets and cutting costs to pay down the debt acquired after the US$9.8-billion purchase of Fording Canadian Coal Trust last year.
China has been pursuing major acquisitions or investments in commodity companies.
Last week, China's Sinopec announced it was to acquire oil explorer Addax Petroleum for US$7.2 billion, in what would be the largest overseas takeover yet by a Chinese company.
Sinopec, a refiner, would gain access to substantial reserves in west Africa and the Middle East if the takeover of Addax is approved.
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