The consideration for the Mutanda shares and the Katanga shares has been determined based on an analysis by BMO Capital Markets. The company was engaged by global mining house and commodities trader, Glencore, to provide an independent view of the value of the Mutanda and Katanga shares.
The consideration for the Mutanda Shares is $922 million and the Katanga shares is $38 million. Glencore now owns 100% of the shares in Mutanda and approximately 86.33% of the shares in Katanga.
It will set-off loans owed to the Group by Fleurette and its affiliates against the cash payable to Fleurette. The loans are secured over the Mutanda shares and amount to $556 million of which $120 million comprises accrued interest.
In addition, Glencore has acquired shareholder loans owed to the Fleurette group by Mutanda Mining to the amount of $130 million. Accordingly, the aggregate cash consideration payable by the Glencore group in respect of the transactions is $534 million.
Glencore has acquired a further 15 325 000 shares in Katanga Mining, corresponding to an approximate 0.8% stake in the company, which were held as the security for a loan provided to Ruwenzori, a member of the Fleurette group, in connection with Ruwenzori’s acquisition of 25 000 000 shares in Nikanor.
The shares were issued as part of a private placement. Nikanor subsequently merged with Katanga and the shares were exchanged for shares in Katanga.
The transactions constitute a smaller related party transaction as defined in Listing Rule 11.1.10 and Glencore has accordingly obtained written confirmation from a sponsor that the terms of the transactions with Fleurette and its affiliates are fair and reasonable as far as the shareholders of Glencore are concerned.