MELBOURNE (Dow Jones)--Australian copper and gold miner OZ Minerals Ltd. (OZL.AU) late Friday received a US$1.2 billion recapitalization proposal from RFC Corporate Finance and RBC Capital Markets.
The offer is an alternative to OZ Minerals selling key assets to China state-owned company China Minmetals Non-ferrous Metals Co. to pay debt.
In a joint statement, the two companies proposed raising US$1 billion in equity and convertible bonds and a further US$220 million under a working capital facility.
RFC Corporate Finance and RBC Capital said their proposal is superior in value to that of Minmetals.
"The combined equity and bond issue will allow OZ Minerals to refinance its debt while keeping its portfolio of attractive assets in the hands of its own shareholders," the two companies said.
An OZ Minerals spokeswoman said the company will consider the proposal from RFC Corporate and RBC Capital.
The pair is proposing a US$220 million share placement at A$0.60 each; a US$450 million, five-year, 8% secured bond issue, which will become convertible at A$0.90 a share if approved by shareholders; a US$330 million two-year, 2% in-the-money subordinated bond issue, which will become convertible at A$0.65 a share if approved by investors; a working capital facility of up to US$200 million; and a follow-on entitlement offer to raise up to A$300 million at A$0.60 a share.
The offer from RFC Corporate and RBC Capital needs acceptance by OZ Minerals' board and is dependent on the Minmetals transaction not proceeding, the companies said.
Earlier Friday, Melbourne-based OZ Minerals said in a statement after the market closed that it hadn't yet received an alternative recapitalization proposal to its planned US$1.2 billion asset sale to Minmetals.
The company's investors will vote Thursday on the Minmetals offer at an annual meeting in Melbourne.
The offer would see Minmetals acquire most of OZ Minerals' mining assets, apart from its Prominent Hill mine in South Australia state.
The OZ Minerals spokeswoman said the company's earlier statement was drafted before it received the RFC Corporate Finance and RBC Capital proposal.
The miner had expected to receive refinancing proposals from one or more entities, but wanted to inform investors that it hadn't yet received any such proposals at the close of Friday's business, she said.
OZ Minerals has previously said it plans to use the funds from the Minmetals deal to pay down some of the A$1.1 billion in debt due for refinancing June 30.
It said Thursday that it expects to have cash balance around A$500 million once the Minmetals transaction is completed.
A Minmetals spokesman said late Friday that the company stood by its offer and was unlikely to alter its proposal.
"We have put forward an offer to OZ Minerals, which we maintain satisfies or meets the interests of all stakeholders," he said.
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OZL Price at posting:
$8.85 Sentiment: Hold Disclosure: Held
