Chinese GP BHR to buy stake in mining asset from Canada’s Lundin
Chinese private equity firm BHR Partners has agreed to acquire a minority stake in Tenke Fungurme Mining, an Africa-based copper asset, from Canada-based Lundin Mining for $1.14 billion in cash.
BHR will buy Lundin's indirect 30% stake in TF Holdings, which owns an 80% interest in the Tenke mine in Democratic Republic of the Congo. The other 70% of TF - and a 56% interest in the mining operation, is held by US-based Freeport McMoRan.
In May, Freeport agreed to sell its stake in TF to China Molybdenum, a Chinese mining-and-processing company, for $2.65 billion as part of a debt-reduction strategy. Lundin had the right of first offer to acquire Freeport's stake at the same price offered by China Molybdenum, but it waived this right.
"It was a difficult decision, respecting the 20 years of Lundin involvement in Tenke, and the special nature of this world class asset," said Lundin CEO Paul Conibear in a release. "The sale will enable Lundin Mining to advance its strategy to incrementally grow the company with projects and operations we control, while maintaining a strong balance sheet."
Lundin generated $1.7 billion in revenue for the year ended December 2015, up from $951.3 million in 2014. However, it recorded a net loss of $281.8 million last year compared to a net profit of $123.4 million in 2014. Cash distributions received by Lundin from Tenke Fungurme came to $24.6 million in 2015, slightly higher than expectations.
Tenke Fungurme, which consists of an open-pit mine and on-site processing facilities, is one of the world's largest copper deposits. It produced 203,964 metric tons of copper last year, higher than the prior year's output of 202,648 tons. Cobalt production for 2015 was 16,014 tonnes, up 20% on 2014.
BHR Partners was set up as an extension of Bohai Industrial Investment Fund (Bohai Capital), in 2009. One element of its business model is to help Chinese industrial players go abroad.
The Lundin's deal includes a termination fee of $100 million, payable by BHR under certain circumstances. The transaction is subject to regulatory approvals, and the completion of Freeport's sale of its interest in TF to China Molybdenum. It is expected to close in the first half of next year.
More on Greater China
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.