Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Minmetals Resources chief executive officer Andrew Michelmore. (BOBBY YIP/Bobby Yip/REUTERS)
Minmetals Resources chief executive officer Andrew Michelmore. (BOBBY YIP/Bobby Yip/REUTERS)

Minmetals lines up funding for Equinox bid Add to ...

Minmetals Resources Ltd., a unit of China's biggest metals trading company, said on Tuesday that three Chinese banks will provide at least $4.6-billion in corporate debt financing for its bid to buy Equinox Minerals Ltd.

A majority of the loan would have a tenure in excess of six years and would be partly secured by its assets, the company said in a statement posted to the Hong Kong stock exchange.

More related to this story

A Chinese institution will also invest $600-million in Minmetals equity if the deal is successful, with the balance of funding required for the $6.5-billion deal to be satisfied by its cash reserves, the company added in the statement.

The company did not give further details on the banks who will be extending the loans or the Chinese institution that will subscribe to its equity issue.

Details of the loan were first reported on Monday by Basis Point, a Thomson Reuters publication.

China Development Bank will take the largest portion of the loan, while Bank of China has also been approached, Basis Point said.

There is still uncertainty if the deal will actually proceed, with Equinox saying on April 8 that Minmetals' offer was too low and leaving the door open to a rival offer as miners vie for access to valuable copper deposits. Surging global demand for copper plus the high cost and long lead time to bring new resources to production have fuelled expectations of more takeover activity and a prolonged bull run in the metal.

Shares of Minmetals fell 2.36 per cent on Tuesday to HK$6.65, underperforming the benchmark Hang Seng index's 1.34-per-cent decline.

Follow us on Twitter: @GlobeInvestor

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories