After half a year global seek, China Investment Corp (CIC) decided on Canadian Teck Resources Limited (Teck) for its overseas mining investment.
In the deal, CIC will acquire 101 million Class B subordinate voting shares from Teck via private placement, at a price of C$17.21 per share, both companies announced on July 3.
This investment involves US$1.5 billion (C$1.74 billion) and on completion, CIC will indirectly hold 17.5 percent of Teck's outstanding Class B subordinate voting shares, representing Teck's 17.2 percent equity and 6.7 percent voting interests in Teck (including Class A and Class B shares). The acquisition is scheduled to complete on July 14.
The Vancouver based resource company is specialized in mining and mineral development with major scopes for zinc, copper, and metallurgical coal. According to Canadian media, Teck's entire stake is divided into Class A and B shares. The company chairman's family – the Keevil's and Japanese Sumitomo are jointly in possession of Teck's 61.8 percent voting interest.
Earlier in May, Teck started negotiations with several potential Chinese buyers to sell its cooking coal assets, an attempt to reduce its huge debt from the US$9.8 billion purchase of Fording Canadian Coal Trust last year.
"This transaction will have an immediate and very positive effect on Teck's balance sheet , and represents an attractive opportunity for Teck to establish a relationship with a major Chinese financial investor, with a deep understanding of China, the world's largest consumer of our principal products," said Teck president and CEO Don Lindsay.
For more information, please consult the original coverage in Chinese at: http://www.china-cbn.com/s/n/000002/20090706/000000119714.shtml
(China.org.cn by Maverick Chen, July 6, 2009)
