Avocet Mining agrees conditional sale of Asian assets for USD200m

Posted on by Listify Me

Dec 27, 2010 (NORDIC BUSINESS REPORT via COMTEX) —

27 December 2010 – Oslo-listed Avocet Mining Plc (LON: AVM) (OSL: AVM) said today it has signed a binding agreement for the conditional sale of its assets in Southeast Asia to Caymans-based private mining fund JPartners for USD200m in cash.

The miner’s goal is to build a bigger business in West Africa, while capturing real value for its shareholders from the assets in Southeast Asia, Avocet Mining’s CEO Brett Richards said.

The assets to be sold include the Penjom mine in Malaysia, the North Lanut mine and Bakan project in North Sulawesi, Indonesia, and a number of exploration properties in the country.

Apart from regulatory approvals and other customary conditions, the transaction depends on the exercise of certain rights of first refusal (ROFR) held by minority parties. In particular, PT Lebong Tandai, which holds 20% in the miner’s 80%-owned PT Avocet Bolaang Mongondow (PT ABM), has a ROFR over Avocet Mining’s stake. If Lebong Tandai exercises its ROFR in PT ABM, it will be required to complete the buy of the miner’s stake for USD 120 million in cash by March 21, 2011. In this instance, the transaction with JPartners will lapse and Avocet Mining will retain Penjom mine and the other exploration assets, while pocketing USD120mfrom the sale of PT ABM.

As part of the deal, JPartners has paid an initial USD10m into an escrow account. A second tranche of USD100m is to be remitted by the end of February 2011 and the remainder s payable upon completion, which is expected to occur in the second quarter of 2011.

As a whole, the sale will generate a pretax profit of some USD100m, Avocet Mining said.

Standard Chartered Bank, part of Standard Chartered Plc (LON: STAN), is acting as financial adviser to Avocet Mining on the transaction, while Field Fisher Waterhouse LLP and Hadiputranto Hadinoto Partners are counselling it on legal matters.

JPartners is consulted by Macquarie Capital (Singapore) Pte Ltd and has as counsels are O’Melveny Myers LLP and Susanto Partners.

(EUR1 = USD1.3)

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