Canada's Imperial Metals hires BMO to speed up restructuring -sources

Imperial Metals

14/12/2018 14:46

By Clara Denina 
    LONDON, Dec 14 (Reuters) - Canadian copper producer Imperial
Metals  III.TO  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 ($114 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  BHP.AX   BLT.L  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.  urn:newsml:reuters.com:*:nL1N1YH0W4
    Canada's Teck Resources Ltd  TECKb.TO ,  TECK.N  agreed to
sell a 30 percent 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
Plc  AAL.L .  urn:newsml:reuters.com:*:nFWN1Y906G  urn:newsml:reuters.com:*:nL8N1TG0SV
    Imperial's shares have fallen for five consecutive years and
are down 63 percent this year, compared to a 15 percent fall in
the price of copper  CMCU3  in the same period.
    
 ($1 = 1.3387 Canadian dollars)

 (Reporting by Clara Denina; Additional reporting by Susan
Taylor in Toronto; Editing by Susan Fenton)
 ((clara.denina@thomsonreuters.com)(+44 207 542 9420)(Reuters
Messaging: clara.denina.thomsonreuters.com@reuters.net)(Twitter:
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