Kenmare Resources to raise €162m as suitor Iluka pulls out

Kenmare Resources is aiming to raise $175m (€162m) in order to make a significant dent in a debt mountain currently measured at nearly $330m.

The Dublin-based mining firm, which owns the Moma Titanium mine in Mozambique, yesterday announced an agreement in principle for a $100m investment from Oman’s sovereign wealth fund, the State General Reserve Fund.

While Kenmare has no urgent repayment deadline looming with its lenders — which are mainly development finance institutions — it is under pressure to present a deleveraging plan by the end of January.

The Omani investment is reliant on the Dublin firm raising additional funds of at least $75m, via an equity raise.

To this end, it is understood that there has already been positive engagement held with larger institutional shareholders.

Kenmare’s news coincided with a separate statement from Australian mining firm, Iluka Resources saying it had pulled its long-standing takeover interest in the Irish company.

Perth-based Iluka had, for some time, been in the frame for a heavily conditioned takeover of Kenmare, speculated to be worth around €265m, but finally pulled out with the Irish firm’s largest shareholder not supporting the transaction at the level Iluka was offering.

It is also understood that Iluka had made progress on a number of other pre-conditions pertaining to the deal.

In response, Kenmare said t it is now focused on “securing the independent future of the company in the interests of all of its stakeholders”.

“As long as Kenmare can get the capital-raising away and lenders continue to be supportive, then this is probably ultimately good for Kenmare, as the revised Iluka offer was fairly low-ball, even at the bottom of the cycle,” researchers at Numis Securities in London said.