Shares in Irish mining company Kenmare Resources have jumped by over 18.5 per cent this morning after the firm unveiled plans to raise capital and pay off its debt.
Kenmare is aiming to raise $275m (£188m) of new equity, and State General Reserve Fund of the Sultanate of Oman (SGRF) has, through its subsidiary African Acquisition Sarl, signed a cornerstone subscription agreement for a $100m equity investment.
Of the total $275m raised, $200m will be going towards repaying and discharging the firm's $269m in debt and accrued interest.
This will leave Kenmare with no more than $100m of residual group debt. Kenmare will also retain $75m for working capital and to cover expenses.
Kenmare boss Michael Carvill said early indications from three of the group's main shareholders showed the company was well on track to meet its $275m target.
"Production and cost guidance for 2016 remains unchanged and the product market is already showing a long awaited improvement in prices, reversing four years of significant downward pressure," Carvill added.
"With increased power stability at the Mine, a recapitalised balance sheet, a new strategic investor and a higher free float than would have existed with two strategic investors, we believe that the completion of the capital restructuring will leave Kenmare in a strong position in an industry with expectations of a growing supply deficiency.”