Photo by: Duane Daws
PERTH (miningweekly.com) – JSE- and Aim-listed Jubilee Platinum’s acquisition of embattled Platinum Australia (PLA) has been abandoned as market conditions weighed on the deal.
In February last year, Jubilee proposed a share-based transaction that would see the junior acquire all the listed ordinary shares of PLA at a rate of one Jubilee share for every 2.6 PLA shares held.
The share consideration was subsequently reduced to one Jubilee share for every 5.68 PLA shares held.
PLA’s administrators said this week that the two parties have now decided to terminate the implementation deed, as they did not believe that the merger transaction could be completed under current market conditions.
Jubilee said that the escalation in the PLA debt had hindered the transaction since the majority of funding raised for the transaction would not be used to recommission the operations but instead was required for the settlement of increased debt against a lower-than-expected platinum metal price.
However, Jubilee noted that both companies had agreed to continue discussions with a view of targeting terms that were more mutually beneficial and were focused more towards the funding of the recommissioning of the mining and processing operation, which included the processing of Jubilee’s platinum containing chrome tailings material.
PLA’s administrators noted that while it was disappointed that the transaction with Jubilee did not proceed, both companies remained convinced that there were strong synergies between the companies and their assets.
While continuing discussions with Jubilee, the PLA administrators would also investigate other options for the company.