The consideration for the Mutanda Shares and the Katanga Shares has been determined based on an analysis by BMO Capital Markets Ltd.
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 Ltd, 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 (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.
