IVERNIA shareholders have given the go ahead to a £41 million rights issue which will be used partly to fund the company's share of the Lisheen zinc mine in Co Tipperary.
An extraordinary general meeting in Limerick yesterday approved the issue of loan stock units at a price of 80p each. The first instalment will he payable immediately.
The second tranche will be payable after the company gets planning permission for the mine, or no later than July 1st, 1998. The units will be automatically converted into new shares of 10p each when this money is paid.
Ivernia's managing director, Mr David Hough, said yesterday that the rights issue should not affect the share price, which last traded at 86p.
He said it is hoped that planning permission will be forthcoming by the end of this month. The mine is being developed by Ivernia and Minorco Lisheen. Even if there is an appeal against permission (or refusal), Mr Hough said he was confident the project would be ready to proceed by December.
The total development cost of the project is estimated at $247 million (£154 million) and it will be financed by a combination of debt and equity. About $17 million has already been spent on the project.
Some of the money raised from the rights issue will be used to pay off debt. Minorco will get $12 million (£7.5 million) and Barclays Bank (£1.8 million). Mr Hough said both Minorco and Ivernia will then be in a very competitively advantageous position to seek financing.
The company will have a debt/ equity ratio of 70/30 and borrowings will amount to around £56 million. When the new shares are taken up, around 102 million shares will be in circulation.
The mine has a projected lifespan of 13.5 years, and 18 million tonnes of zinc/lead. The company has been carrying out further exploration which has produced positive results, according to Mr Hough. He believes the mine's lifespan can be extended.
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