African copper plunges after bond-repayment demand
Monday, 18 May 2009
LONDON, May 17 (Bloomberg): African Copper Plc, which shut a mine in January after running out of cash, fell the most in six months in London trading after the holder of a bond issue demanded immediate repayment.
African Copper slid 35 per cent. The London-based company has breached the 150 million-Botswana-pula ($21 million) issue's terms, Natasa Mining Ltd., owner of the bonds, said today in a Regulatory News Service statement. It petitioned the High Court of Botswana to wind up African Copper's Messina Copper unit, the bond issuer, the statement shows.
Natasa also made an offer to recapitalise African Copper, enable the company to settle its debts and "commercialise" the Mowana mine, it said in a separate statement.
African Copper agreed in March to a $15 million investment from Natasa in return for a controlling stake. In the following month, Zambia Copper Investments Ltd. offered $22.5 million in financing. African Copper stockholders rejected Natasa's offer this month in favor of the proposal from Zambia Copper, which has a stake in three mines in the country.
The company declined 3.63 pence to 6.88 pence at the close of London trading, posting the second-biggest drop in the 1,005- company FTSE AIM Index. The shares cost 76 pence each at the company's initial public offering. The market value has shriveled to 10.1 million pounds ($15 million) from 35 million pounds when the stock began trading.
Today's drop was the stock's biggest since Nov. 14 based on closing prices. Investors bought and sold 41.4 million shares, more than 10 times the six-month daily average.
Sydney-based Natasa said it's owed $25.6 million by African Copper, including an earlier loan. African Copper said yesterday it was seeking legal advice on Messina's obligations. Zambia Copper will gain a 70 per cent stake in return for its financing.
African Copper Chief Executive Officer Joseph Hamilton didn't immediately return calls placed to his office in London today.
African Copper slid 35 per cent. The London-based company has breached the 150 million-Botswana-pula ($21 million) issue's terms, Natasa Mining Ltd., owner of the bonds, said today in a Regulatory News Service statement. It petitioned the High Court of Botswana to wind up African Copper's Messina Copper unit, the bond issuer, the statement shows.
Natasa also made an offer to recapitalise African Copper, enable the company to settle its debts and "commercialise" the Mowana mine, it said in a separate statement.
African Copper agreed in March to a $15 million investment from Natasa in return for a controlling stake. In the following month, Zambia Copper Investments Ltd. offered $22.5 million in financing. African Copper stockholders rejected Natasa's offer this month in favor of the proposal from Zambia Copper, which has a stake in three mines in the country.
The company declined 3.63 pence to 6.88 pence at the close of London trading, posting the second-biggest drop in the 1,005- company FTSE AIM Index. The shares cost 76 pence each at the company's initial public offering. The market value has shriveled to 10.1 million pounds ($15 million) from 35 million pounds when the stock began trading.
Today's drop was the stock's biggest since Nov. 14 based on closing prices. Investors bought and sold 41.4 million shares, more than 10 times the six-month daily average.
Sydney-based Natasa said it's owed $25.6 million by African Copper, including an earlier loan. African Copper said yesterday it was seeking legal advice on Messina's obligations. Zambia Copper will gain a 70 per cent stake in return for its financing.
African Copper Chief Executive Officer Joseph Hamilton didn't immediately return calls placed to his office in London today.