Provident increases stake in mining firm Sumatra

According to a regulatory filing, the funding package comprises three components, including a fully underwritten placement of 38 million depository interests to raise an initial A$8.36 million, with Provident taking the full placement.

Sumatra will also undertake an entitlement offer to raise A$20 million, with a further A$35 million in project funding secured from Credit Suisse. Under the terms of the debt facility, Sumatra is required to raise a minimum of A$20 million in equity and complete the final forestry permitting process.

Provident orginally paid A$0.135 a share for an 8.79% stake in the company in September last year. The firm then raised its stake in Sumatra to 26% in December.

Once Sumatra has secured the forestry permit for Tembang, which is expected to happen at the end of next month, Provident will underwrite a $20-30 million rights issue, enabling the fund and associated shareholders to maintain a stake of around 51% in the company.

"The problem is the Australian market hasn't seen any success [in Indonesia]," Gavin Caudle, founder of Provident, said in statement, referencing the fact that the two gold projects to begin production in Indonesia in the past year are owned by companies listed in Hong Kong and the UK."What we see is, if the market is not going to give Sumatra fair value, then we will. For all the risk Australians see, we see almost zero."

 

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• Topics
• Australasia
• Industrials
• Investments
• PIPEs
• Southeast Asia
• Australia
• Indonesia
• PIPE
• Commodities