JSE-listed gold mining company Sibanye-Stillwater has announced its intention to increase its shareholding in Keliber Oy, a Finnish mining and battery chemical company from its initial 30.29% acquired in February 2021, to 50% plus one share in a pre-emptive offer, for a cash consideration of €146 million.
The Finnish company owns the Keliber project, which is premised on advanced lithium hydroxide, and intends to sustainably produce battery-grade lithium hydroxide using its own ore.
In a statement issued on Thursday, the company said it will also make a voluntary cash offer to the minority shareholders of Keliber, excluding the state-owned Finnish Minerals Group, for a total consideration of €196 million (excluding transfer tax) which could increase its shareholding in Keliber to 86.1%, with the Finnish Minerals Group retaining 13.9% (from its current circa 20% shareholding).
Sibanye-Stillwater says subsequent to the completion of the voluntary offer, a capital raise by Keliber will be executed. Sibanye says the capital raise will be executed to achieve a 50:50 debt to equity ratio, with a maximum possible total cost of €104 million to Sibanye-Stillwater.
The transaction entails a maximum total cost of approximately €446 million to Sibanye-Stillwater, excluding transfer tax, of which it will contribute up to €250 million in equity.
“This is a further significant step in our strategy to build a unique global portfolio of green metals in a value accretive manner,” says Sibanye-Stillwater CEO Neal Froneman.
Froneman says the Keliber project is expected to be the first mining and metallurgical operation in Europe to deliver high-quality, low-cost lithium hydroxide, with a low carbon footprint, and ideally placed amid a growing European battery industry.
The gold mining company says it expects all aspects of the transaction sequence, which includes implementing the pre-emptive offer on 11 July 2022 and launching the voluntary offer, to be completed by 13 February 2023.
Moreover, precedent conditions for the transaction include:
- The South African Reserve Bank’s approval;
- 50% of Keliber shareholders voting in favour of the project financing, including both equity and debt components;
- The voluntary offer is subject to the passing of resolutions at the extraordinary general meeting approving the pre-emptive offer and capital raise;
- The absence of a material adverse change; and
- The capital raise is subject to the successful exercise of the pre-emptive offer by Sibanye-Stillwater.
Nondumiso Lehutso is a Moneyweb intern.