Blumont receives $200m injection to support Discovery Metals investment

Singapore-listed Blumont said in a regulatory filing that it would issue bonds to Platinum in four equal tranches of $50 million each with a coupon rate of 8% per annum and a conversion price of S$0.20-0.40 per share. Apart from the $100 earmarked for Discovery Metals, the capital will be used to finance future investments in the mineral and energy resources sector and for working capital.

Blumont has lost around S$6.26 billion ($5.05 billion) in market value since the start of October, with its shares currently trading at S$0.114.

The company previously agreed to subscribe to 73 million shares in Discovery Metals at A$0.12 apiece for a total consideration of A$8.77 million ($8.4 million) in addition to extending the convertible bond facility. If fully converted, Blumont will own 62% of Discovery Metals.

Discovery Metals owns the Boseto Copper Project in Bostwana, which commenced operation in 2012 and has an annual production capacity of approximately 36,000 metric tons of copper and more than 1 million ounces of silver. It also holds a further 18 prospecting licenses in the Kalahari Copperbelt.

CFC, which was founded by Chinese billionaire Yong Yu, abandoned its A$830 million takeover bid for the company in February. Yu said in a statement that the bid was being withdrawn due to concerns with information included in previous disclosures by Discovery.

In October, CF Investments, 75% owned by CFC and 25% by the China-African Development Fund (CAD), had offered A$1.70 a share in cash for all outstanding shares in Discovery. CFC already owned 13.7% of the company. The Discovery board dismissed the offer as inadequate, prompting CFC to make a direct approach to shareholders.

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