Afferro Mining Inc. (TSX: V.AFF, Stock Forum) provided an update on today's announcement made by International Mining and Infrastructure Corp. plc. (IMIC), an energy sector investor, regarding a potential offer for the entire issued share capital of the company.
According to the Afferro Mining press release, the potential offer is subject to a number of pre-conditions including successful raising of finance for the transaction, completion of documentation required to enact a reverse takeover under the AIM Rules for the London Stock Exchange plc and negotiation of an arrangement agreement.
Under the IMIC proposal Afferro shareholders would be given three options for receiving consideration in respect of their shares, namely, 80% in cash plus a convertible loan note of 20%, making a total of 100% for each Afferro share or 50% in cash plus a convertible loan note of 70%, making a total of 120p for each Afferro share or shares in IMIC equivalent to a valuation of 140% for each Afferro share
The cash portion in the above options will be subject to a limit of US$100 million. The convertible loan notes will carry a coupon of 8%, rolled up and paid at the end of the 24-month duration of the loan notes or on conversion into IMIC shares.
IMIC has advised the company that, within 15 business days at the latest, it intends to provide written undertakings that the minimum US$100 million cash is available to execute the above proposal.
"The proposed IMIC offer announced today is an endorsement of the strong progress that Afferro has made to develop a portfolio of strategically located iron ore projects in Cameroon,” said Luis da Silva, Afferro’s CEO. “We are encouraged to see continued strong industry interest in Afferro and will continue to investigate options as they are presented with shareholders' interests always at the centre of everything we do.”
Afferro is an established exploration and development company focused on iron ore in Cameroon.
On Wednesday, Afferro gained 12% and was trading at $1.12 a share. The company had a market cap of $117.7 million, based on 105 million shares outstanding. The 52-week high and low was $2.40 and $0.62 respectively.