Discovery Metals says discussions are ongoing with suitors over a possible takeover transaction and added that it is studying a re-financing proposal from an unnamed financier. The Australian company, which owns the Boseto Copper project in Botswana has put ‘for sale’ sticker since its key shareholder declined to participate in raising equity earlier this year instead preferring that the company be sold competitively.
Chinese outfit, Cathay Fortune Corporation (CFC) owns 13.7% of Discovery Metals and has previously made an unsuccessful takeover offer to the DML board.
“ The company wishes to inform shareholders that Discovery Metals Limited continues to be in discussions with interested parties in relation to a potential transaction,” said Discovery in a note to shareholders.
“Further, the company has received an indicative, non-binding re-financing proposal which it is currently evaluating.”
Discovery Metals advised its shareholders that there is no guarantee that an acceptable binding proposal will be forthcoming from these discussions.
It also revealed that additionally, it is working with lenders with a view to re-profiling its debt over a longer timeframe and has been granted a waiver so that funding of the Debt Service Reserve Account (DSRA) is capped at US$8m up to and including 31 December 2013 (the DSRA is currently funded to US$7.7m and was previously required to be topped up to approximately US$19.2m by 30 September 2013).
“The Company and its lenders have jointly agreed to extend the date for a final board recommended offer to 16 September 2013.”