China’s MMG Announces $1.16 Billion Rights Issue to Pay Debts

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China Minmetals Corp. holds a 67.5% stake in MMG Ltd.

China’s state-owned miner MMG Ltd. said Tuesday that it plans to raise HK$9.08 billion ($1.16 billion) through a rights issue of 3.47 billion shares to repay existing debt, allowing the company to better support the ongoing development of its operating mines.

The company will issue 2 new shares for every 5 shares held for a subscription price of HK$2.62 per share.

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MMG Ltd. plans to raise HK$9.08 billion ($1.16 billion) through a rights issue of 3.47 billion shares at HK$2.62 per share.
Up to $611 million will repay a shareholder loan for its Botswana copper mine acquisition; an additional $200 million will cover parts of another $2.26 billion loan.
MMG aims to expand the Botswana mine, requiring $700-$800 million in capital expenditure, and has formed a joint venture with China Reform Holdings Corp. to reduce risk and debt.

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Who’s Who

MMG Ltd.: MMG Ltd. is a state-owned miner based in Melbourne, Australia, and listed on the Hong Kong Stock Exchange. It operates and develops copper, zinc, and other base metal projects in Australia, Botswana, the Democratic Republic of Congo, and Peru. MMG plans to raise HK$9.08 billion through a rights issue mainly to repay debt and support mine development. China Minmetals Corp. holds a 67.5% stake in MMG.

China Minmetals Corp.: China Minmetals Corp. is the parent company of MMG Ltd., holding a 67.5% stake in the unit. It provided the $1.9 billion shareholder loan for MMG's acquisition of the Khoemacau copper mine in Botswana. An affiliate of China Minmetals, Top Create Resources, also extended additional loans to MMG to support various operations and debt repayments.

Top Create Resources: Top Create Resources is an affiliate of MMG Ltd.'s parent company, China Minmetals Corp. It provided a $1.9 billion shareholder loan to fund MMG's acquisition of the Cuprous Capital Ltd., the sole owner of the Khoemacau copper mine in Botswana. Additionally, Top Create Resources has provided another $2.26 billion shareholder loan to MMG.

China Reform Holdings Corp.: China Reform Holdings Corp. is a state-owned investment company that has formed a joint venture with MMG Ltd. for the Khoemacau copper mine in Botswana. MMG will hold a 55% stake in this joint venture, which aims to diversify risks and reduce MMG's debt burden.

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