Kenmare Resources reached an agreement with the “State General Reserve Fund”, the sovereign wealth fund of Oman, for an investment of US$100 million in the company, according to a statement released Wednesday by the Irish company.
The company, which explores deposits of heavy minerals in Mozambique at the Moma mine in Nampula province, plans to raise US$175 million to reduce current financial liabilities of US$330 million.
The agreement in principle assumes that Kenmare Resources can raise the remaining US$75 million through a share issue.
Although the company is not being pressed by its creditors to start paying off the debt, it has to submit a plan to this effect by the end of January, especially after Australian mining company Iluka Resources gave up the intention to buy Kenmare Resources.
The announcement made by Kenmare Resources about the agreement with the sovereign wealth fund of Oman on the entry of capital and the proposed debt repayment coincided with Iluka Resources abandoningthe idea of buying the Irish company.
Kenmare’s main asset is the Moma mine in Mozambique, which extracts minerals such as ilmenite, rutile and zircon and employs about 13,000 people.
The company, listed on the London Stock Exchange and a secondary listing on the Dublin stock exchange, has seen its share price fall, as well as a drop in the price of the ores it extracts in Mozambique, particularly ilmenite. (macauhub/MZ)