THE PATH has been cleared for Kenmare Resources to raise almost €200 million after shareholders approved a proposed issue of nearly 1.5 billion new shares at an extraordinary general meeting yesterday.
The Dublin-headquartered mining company hopes to raise £179.6 million (€196m) through a share placing and open offer, which it will use to finance the expansion of its Mozambique titanium mine. Kenmare said yesterday that 73.5 per cent of shares available under the open offer have already been accepted by qualifying shareholders.
The capital-raising exercise remains conditional on the admission of the new shares to the Irish and London stock exchanges. This is expected to happen on Thursday.
Kenmare’s managing director Michael Carvill told shareholders at yesterday’s meeting in Dublin that the company anticipated “exceptional growth” in demand for titanium-dioxide pigment in the coming years, driven largely by emerging economies such as China. At the same time, major titanium producers were expected to reduce their future production of the mineral.
He predicted that these two factors would lead to a significant supply deficit over the next five years. Kenmare’s expansion plans for its Moma mine in Mozambique would increase its production capacity by 50 per cent.
He said although Kenmare was heavily indebted, (it owed $188 million in senior debt and $165 million in subordinated debt at the end of 2009), none of the funds raised would be used to pay off its lenders. Instead the company hoped a much higher “cash throw-off” post-expansion would allow it to pay off its debts at a much faster rate at that point.
