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GLN - Glencore purchases stakes in Mutanda and Katanga
GLENCORE XSTRATA PLC
(Incorporated in Jersey under the Companies (Jersey) Law 1991)
(Registration number 107710)
JSE Share Code: GLN
LSE Share Code: GLEN
HKSE Share Code: 805HK
ISIN: JE00B4T3BW64
Baar, Switzerland
13 February 2017
Glencore purchases stakes in Mutanda and Katanga
Glencore has today purchased from subsidiaries of Fleurette Properties Limited (“Fleurette”) the Fleurette
group’s remaining 31% stake in Mutanda Mining Sarl (the “Mutanda Shares”) and an approximate
10.25% stake in Katanga Mining Limited (the “Katanga Shares”).
The consideration for the Mutanda Shares and the Katanga Shares has been determined based on an
analysis by BMO Capital Markets Limited who was engaged by Glencore to provide an independent view
as to the value of the Mutanda Shares and Katanga Shares for the purposes of the transaction.
The consideration for the Mutanda Shares is US$922 million and the Katanga Shares is US$38 million.
Glencore will set-off against the cash consideration payable to Fleurette, loans owing to the Glencore
group by Fleurette and its affiliates, and secured over the Mutanda Shares, amounting to US$556 million
of which US$120 million comprises accrued interest. In addition, Glencore has acquired shareholder
loans owed to the Fleurette group by Mutanda Mining Sarl in the amount of US$130 million.
Accordingly, the aggregate cash consideration payable by the Glencore group in respect of the
transactions is US$534 million.
In addition, Glencore has acquired a further 15,325,000 shares in Katanga Mining Limited (“Katanga”),
corresponding to an approximate 0.8% stake, which were held as the security for a loan provided to
Ruwenzori Limited, a member of the Fleurette group, in connection with Ruwenzori’s acquisition of
25,000,000 shares in Nikanor PLC which were issued as part of a private placement. Nikanor PLC
subsequently merged with Katanga and the shares were exchanged for shares in Katanga.
Glencore now owns 100% of the shares in Mutanda and approximately 86.33% of the shares in Katanga.
The transactions (taken together) constitute a smaller related party transaction as defined in Listing Rule
11.1.10 and Glencore has accordingly obtained written confirmation from a sponsor that the terms of the
transactions with Fleurette and its affiliates are fair and reasonable as far as the shareholders of
Glencore are concerned.
For further information please contact:
Investors
Martin Fewings t: +41 41 709 2880 m: +41 79 737 5642 martin.fewings@glencore.com
Carlos Francisco t: +41 41 709 2369 m: +41 79 129 9195 carlos.fernandez@glencore.com
Fernandez
Media
Charles Watenphul t: +41 41 709 2462 m: +41 79 904 3320 charles.watenphul@glencore.com
Pam Bell t: +44 20 7412 3471 m: +44 77 3031 9806 pam.bell@glencore.co.uk
About Katanga and Mutanda
Mutanda Mining SARL
Mutanda is a high grade copper and cobalt producer, with its operations located in the province of
Lualaba in the DRC. As of December 2016, Mutanda production was at an annualized production rate of
above 200 ktpa. of copper cathodes and 24 ktpa of cobalt in hydroxide. In addition, Mutanda has installed
capacity to produce 390 tonnes per day of sulfuric acid and 73 tonnes per day of sulfur dioxide, for use in
the hydrometallurgical complex.
Katanga Mining Limited
Katanga operates a major mine complex in the Democratic Republic of Congo producing refined copper
and cobalt. The company has the potential to become Africa's largest copper producer and the world's
largest cobalt producer. Katanga is listed on the Toronto Stock Exchange under the symbol KAT.
Katanga’s processing operations were suspended in September 2015 with no production in Q4 2015.
Full year copper production for 2015 from own sources was approximately 113kt. The suspension
continued through 2016 and production is expected to resume once the Whole Ore Leach project is
completed which is expected in the second half of 2017. Financial results for Katanga can be found on
www.katangamining.com.
Additional disclosure pursuant to Canadian securities laws
Immediately before the transactions described above, Glencore, through its wholly-owned subsidiary
Glencore International AG (“GIAG”), beneficially owned, or had control or direction over, 1,435,848,228
shares in Katanga representing approximately 75.28% of the outstanding shares of Katanga. GIAG
acquired a total of 210,765,700 shares in Katanga from Fleurette. After giving effect to the acquisitions
described above, the percentage of the outstanding shares of Katanga beneficially owned by Glencore,
or over which it had control or direction, increased by 11.05% and Glencore now beneficially owns, or has
control or direction over, a total of 1,646,613,928 shares in Katanga representing approximately 86.33%
of the outstanding shares of Katanga (based on there being a total of 1,907,380,413 shares of Katanga
outstanding).
The Katanga Shares were purchased for an aggregate purchase price of US$37,691,546.73 or
US$0.19285 per share. Using the Bank of Canada noon exchange rate on February 10, 2017, this
represents an aggregate value of C$49,277,929.50 or C$0.25214 per share.
Glencore’s acquisition of shares in Katanga was made as part of a broader series of transactions with the
Fleurette group as described above. Glencore holds its interest in Katanga for investment purposes and
will continue to review its investment alternatives from time to time, and may determine to increase or
decrease its equity ownership in Katanga through the acquisition or sale of shares of Katanga or other
securities of Katanga through open market or privately negotiated transactions in accordance with
applicable securities laws.
In purchasing the Katanga Shares, Glencore has relied on the “private agreement exemption” contained
in section 4.2 of National Instrument 62-104 – Take-Over Bids and Issuer Bids (“NI 62-104”) on the basis
that (i) the purchase was not made from more than five persons in the aggregate, (ii) the offer to
purchase was not made generally to all holders of shares of Katanga, and (iii) the value of the
consideration paid for the Katanga Shares, including brokerage fees or commissions, was not greater
than 115% of the market price of the shares of Katanga, as determined in accordance with section 1.11 of
NI 62-104.
Katanga’s head office is located at Suite 300, 204 Black Street, Whitehorse, Yukon, Canada, Y1A 2M9.
Glencore and GIAG’s head office is located at Baarermattstrasse 3, CH-6340 Baar, Switzerland.
A copy of the early warning report corresponding to this press release can be obtained by contacting the
persons named above and will be filed on SEDAR at www.sedar.com.
This announcement contains inside information.
Notes for Editors
Glencore is one of the world’s largest global diversified natural resource companies and a major producer
and marketer of more than 90 commodities. The Group's operations comprise around 150 mining and
metallurgical sites, oil production assets and agricultural facilities.
With a strong footprint in both established and emerging regions for natural resources, Glencore's
industrial and marketing activities are supported by a global network of more than 90 offices located in
over 50 countries.
Glencore's customers are industrial consumers, such as those in the automotive, steel, power
generation, oil and food processing sectors. We also provide financing, logistics and other services to
producers and consumers of commodities. Glencore's companies employ around 160,000 people,
including contractors.
Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the
International Council on Mining and Metals. We are an active participant in the Extractive Industries
Transparency Initiative.
www.glencore.com
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SPONSOR
Absa Bank Limited (acting through its Corporate and Investment Banking Division)
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