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GLN - Settlement of DRC Legal Dispute with Gécamines and Agreement for the Resolution of KCC’s Capital Deficiency
Glencore 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
12 June, 2018
Katanga Mining announces settlement of DRC Legal Dispute with Gécamines and Agreement
for the Resolution of KCC’s Capital Deficiency
Glencore refers to the announcement today by Katanga Mining Limited (“Katanga”) in
which it announced the settlement of the DRC legal dispute with La Générale des
Carrières et des Mines (“Gécamines”) and an agreement for the resolution of the
capital deficiency at Katanga’s 75% owned DRC operating subsidiary Kamoto Copper
Company (“KCC”).
Glencore is pleased that this matter has now been resolved and looks forward to
supporting KCC’s closer partnership with Gécamines as the parties work together to
ensure that the Joint Venture reaches its full potential for the benefit of all
stakeholders.
The key highlights of Katanga’s settlement agreement with Gécamines are as follows:
- Conversion of US$5.6 billion of KCC’s total debt of approximately US$9 billion
into new KCC equity such that, with retroactive effect as at January 1st, 2018,
KCC has $3.45 billion of debt to KML Group, bearing interest at the lower of
US$ Libor 6 month + 3% and 6% per annum;
- Katanga and Gécamines’ shareholdings in KCC remain unchanged at 75% and 25%
respectively;
- a one-time payment to Gécamines of US$150 million relating to historical
commercial disputes;
- certain amendments to the dividend payment and free cash flow provisions of
KCC including an amortization schedule for the repayment of the residual debt;
- payment of approx. $US 41 million to Gécamines in relation to outstanding
expenses incurred as part of an exploration program;
- waiver by KCC of its entitlement (or financial equivalent) to replacement
reserves and associated incurring of drilling costs on Gecamines’ behalf,
amounting to US$285 million and US$57 million respectively, and
- withdrawal of all legal action by Gécamines.
Other key terms are detailed in the Katanga press release at the following link:
http://www.katangamining.com/media/news-releases/2018.aspx.
The entry of the settlement agreement between Katanga and Gécamines constitutes a
smaller related party transaction as defined in Listing Rule 11.1.10 because
Gécamines holds more than 10% of the voting rights in a material subsidiary of
Glencore. Accordingly, as a condition precedent to the Settlement Agreement becoming
effective, Glencore must obtain written confirmation from a sponsor that the terms
of the Settlement Agreement with Gécamines are fair and reasonable as far as the
shareholders of Glencore are concerned. Glencore aims to obtain such written
confirmation on or before 14 June, 2018.
For further information please contact:
Media
Charles Watenphul t: +41 41 709 24 62 m: +41 79 904 33 20 charles.watenphul@glencore.com
Investors
Martin Fewings t: +41 41 709 2880 m: +41 79 737 5642 martin.fewings@glencore.com
Ash Lazenby t: +41 41 709 2714 m: +41 79 543 3804 ash.lazenby@glencore.com
www.glencore.com
Glencore LEI: 2138002658CPO9NBH955
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 146,000 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.
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Disclaimer
The companies in which Glencore plc directly and indirectly has an interest are
separate and distinct legal entities. In this document, “Glencore”, “Glencore group”
and “Group” are used for convenience only where references are made to Glencore plc
and its subsidiaries in general. These collective expressions are used for ease of
reference only and do not imply any other relationship between the companies.
Likewise, the words “we”, “us” and “our” are also used to refer collectively to
members of the Group or to those who work for them. These expressions are also used
where no useful purpose is served by identifying the particular company or companies.
Sponsor
Absa Bank Limited (acting through its Corporate and Investment Bank Division)
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