Champion raises $100m to complete Norwegian iron-ore purchase
TSX- and ASX-listed Champion Iron has completed a $100-million private placement of subscription receipts with Caisse de dépôt et placement du Québec to help fund its proposed acquisition of Norwegian iron-ore producer Rana Gruber.
The company issued about 26.8-million subscription receipts at $3.73 (C$5.15) each, with the proceeds to be held in escrow pending satisfaction of conditions linked to its recommended cash tender offer for Rana Gruber.
The funds will be released once the minimum acceptance condition and other closing requirements of the offer have been met. Should the transaction not proceed, the proceeds will be returned to La Caisse with accrued interest.
Champion said the financing strengthens its balance sheet and supports its strategy to expand its high-grade iron-ore portfolio through the proposed acquisition of Norway's only iron-ore producer.
The company in late December announced an offer to buy Rana Gruber at $7.79 a share, representing a total equity value of about $289-million. At the time, Champion said it would fund the transaction through a combination of equity, debt, and cash on hand, including a $100-million equity private placement with Caisse de dépôt et placement du Québec and a fully committed term loan in the amount of $150-million underwritten by The Bank of Nova Scotia.
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