Chinese private equity firm Cathay Fortune Corp has said it will not support refinancing plans for Australian mining group Discovery Metals.
“We strongly oppose it and will not participate,” Cathay Fortune said in a statement sent to Reuters.
In March, Discovery Metals said that its existing lenders had consented to an amended project finance and corporate revolver facilities, including extensions to repayment schedules and waivers on debt covenants.
The company claimed the new amendment package cured “all technical breaches” of the its financing facilities in the financial report for the half year up to 31 December 2012.
The package offers a “significant improvement” in working capital by deferring the project loan principal repayments of approximately £17.5m each which were previously due at the end of March and June 2013.
Discovery Metals also announced plans for a debt capital markets issuance to raise between $200m and $250m to replace existing project linked debt.
On 19 April a trading halt was placed on Discovery Metals’s stock was placed in Trading Halt Session.
“Unless ASX decides otherwise, the securities will remain in Trading Halt Session State until the commencement of normal trading on Tuesday, 23 April 2013, or when the announcement is released to the market,” it said.
Discovery Metals, which is listed on the Australian ASX/BSE exchange, focuses exploration and production on the emerging Kalahari copper belt in north west Botswana. It also has prospecting licences covering more than 11,800 sq km of the Kalahari belt.
In February, Cathay Fortune said it would no longer seek to acquire Discovery Metals.
The firm, which was part of an investment consortium comprising Africa Development Fund, said it had concerns over DML’s copper mining activities in Botswana.
Cathay had previously made a A$830m ($848m) offer to acquire the company, at A$1.70 per share. The all-cash deal was backed by a $600m loan from the China Development Bank.
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