Gindalbie to raise $162m 3-November-08 by Rebecca Lawson
Gindalbie Metals Ltd plans to raise $162 million through a share placement to Chinese project partner AnSteel to cover its final payment towards the $1.8 billion Karara iron ore joint venture.
A Gindalbie spokesperson told WA Business News the trading halt will remain in place until the board passes down its decision on the placement, expected within days.
Shares in Gindalbie last traded at 41.5 cents.
Both companies were due to make final payments of $143.68 million each towards the Karara joint venture last month.
So far AnSteel has contributed $228 million towards Karara, with its final payment to be delayed until the placement is completed, the spokesperson said.
Gindalbie had previously exercised its right, under the JV terms, to request AnSteel to arrange finance for its share of the final equity contributions.
The $162 million placement proposal will cover Gindalbie's final Karara payment plus the first payment of $18.4 million.
In a statement, Gindalbie said shares in the placement will be at a substantial premium to the current share price.
"In the current market this is a very positive alternative as it would leave Gindalbie itself debt-free," Gindalbie chairman George Jones said.
"We expect to conclude a suitable arrangement with Ansteel for Gindalbie's share of the final equity contribution to meet the final contribution as soon as reasonably practicable."
At the end of the September quarter, Gindalbie had $129.8 million in the bank.
GBG Price at posting:
40.4¢ Sentiment: LT Buy Disclosure: Held
