Smelter Sale To Give Zinifex War Chest
The Age
Tuesday October 16, 2007
ZINIFEX expects to receive between $1.2 billion and $2.2 billion from the sale of its smelters by the end of the month, depending on the success of Nyrstar's public offering in Belgium.
Nyrstar, a joint venture between Zinifex and Belgium's Umicore, yesterday released a prospectus including an indicative offer size and price. The partners expect to sell at least 70 per cent of their holding to outside investors and have retained the option of selling all 100 million shares depending on investor demand. Zinifex owns 60 per cent of Nyrstar, which will sell shares through a book-build at a price between EUR18 ($28.21) and EUR23 a share. At the lower end, if 70 per cent of its shares sold for EUR18 apiece, Zinifex would earn $1.2 billion from the float. If Zinifex managed to sell all its shares in Nyrstar for EUR23 each, it would earn $2.2 billion. Zinifex wants to put the money towards growth and is particularly looking to purchase advanced copper projects or copper mines. The company expects to return any remaining proceeds to its shareholders. BT Financial's Tim Barker said the Nyrstar book-build price range was at the lower end of expectations. "It certainly looks like it's priced so this gets off and is successful," he said. "You'd think if the market remains buoyant for the next few weeks, there's every chance it will do." Nyrstar shares are being offered only to institutional investors outside Belgium. The offer, which opened yesterday, will close on October 26. The final price is expected to be announced at the time of listing on or around October 29. Although zinc prices have fallen from a high of $US4500 a tonne last December to about $US3000, UBS said the short-term outlook for the metal might not be as bleak as the price suggested. Mining consultancy Brook Hunt estimates zinc demand in China will grow 9.5 per cent this year, compared with 11 per cent last year. Zinifex shares fell 36? to $18.23 yesterday.
© 2007 The Age
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