Financier Robert Friedland has made some highly frothy comments in connection with a
Turquoise Hill Resources Ltd. (
TSX: T.TRQ,
Stock Forum) rights offering.
In an email to Tommy Humphries at CEO.CA, Friedland said Turquoise Hill shareholders should participate in the rights offering, which aims to raise $2.4 billion, money that will be used to repay amounts owed to the company’s majority shareholder
Rio Tinto PLc (
NYSE: RIO,
Stock Forum).
Friedland’s spokesman in Vancouver said the financier owns 8% of Turquoise Hill, which in turn holds a 66% stake in the massive Oyu Tolgoi copper-gold-silver mine in Mongolia.
Turquoise Hill said last week the company has filed a final prospectus with securities regulators, outlining details of a rights offering.
Under the terms of the offering, each Turquoise Hill shareholder will receive one transferrable right for each common share held as of December 6, 2013.
Each right entitles the holder to purchase one common share of the company at either US$2.40 per share or US$2.53 per share, an amount that represents a discount of approximately 42% to the closing prices on the NYSE and TSX on November 25, 2013.
Turquoise Hill shares rose 3.6% to $4.27 Tuesday, leaving a market cap of $4.3 billion, based on over one billion shares outstanding. The 52-week range is $9.62 and $3.81.
Under an earlier agreement Rio Tinto is required to acquire any shares not taken up under the rights offering.
“People should buy the rights and exercise them hand over fist,’’ Friedland told CEO.CA by email on Monday evening.
He went on to say in the email that “post the rights issues, the company is in full commercial production, the company will be debt free and have receivables of $750+ millions in copper-gold inventory and sales pipeline, plus a $2 billion receivable from the Mongolian government.”
“Idiots in Canada do not understand rights offerings are not dilution..everyone participates equally…rights offerings are the fairest form of equity finance ever developed by the human mind,’’ he said.
Turquoise Hill has said over one billion shares are expected to be issued under the rights offering.
It seesm that Humphreys attended one of Friedland’s speaking engagements in London this week.