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Imperial Metals hires BMO to speed up restructuring – sources

15th December 2018

By: Reuters

  

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LONDON – Canadian copper producer Imperial Metals has hired Bank of Montreal (BMO) to speed up a restructuring process that could include the sale of the company for up to $1-billion, two sources familiar with the matter said.

Imperial Metals, backed by Canadian billionaire Murray Edwards, earlier this year set up a special committee to identify strategic alternatives including joint ventures and a total or partial sale of the business.

It has now mandated the Canadian investment bank to start a formal process, the sources said.

Imperial Metals did not respond to a request for comment and BMO declined to comment.

The company produces copper and gold at its Red Chris, Mount Polley and Huckleberry mines and lead and zinc at half-owned Ruddock Creek mine, all in British Columbia.

With a market capitalisation of C$152-million and a debt of C$852.4-million in 2017, the company was guaranteed an extension of its C$200-million credit facility by a company controlled by main shareholder Edwards earlier this year.

Prior to starting its review in September, the company said it had been in talks with another party for a joint venture agreement at its Red Chris mine.

Copper is highly sought after by mining companies because it's viewed as having one of the brightest outlooks, with existing reserves dwindling and strong demand for use in electric cars expected.

But deals in the sector have not been abundant, partly due to a lack of high-quality assets and funding complications for potential buyers.

The world's largest listed miner BHP this week called off the $320-million sale of Chile's Cerro Colorado mine to private equity fund EMR Capital, due to problems with financing the deal.

Canada's Teck Resources agreed to sell a 30% stake in its Quebrada Blanca copper mine expansion in northern Chile to Japan's Sumitomo for $1.2-billion, while Mitsubishi agreed to raise its stake in the Quellaveco copper project in Peru it shares with Anglo American.

Imperial's shares have fallen for five consecutive years and are down 63% this year, compared to a 15% fall in the price of copper in the same period.

Edited by Reuters

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