RESOURCE-FOCUSED investment house the International Mining and Infrastructure Corporation (IMIC) yesterday announced that it has successfully secured the US$100m (£64m) financing it needs to make a formal takeover bid for Aim-listed Afferro Mining.
The company made a potential offer last month – valuing Afferro between £105m and £147m – but it was subject to raising funds, which analysts were sceptical the diminutive company could achieve in a challenging market.
IMIC issued two $15m bonds but would not reveal who loaned the rest. “It’s not really relevant who provided it, what’s important is that it’s in place,” chairman Haresh Kanabar told City A.M.
“It is a challenge to raise funding, particularly in the equity market at the moment.”
Kanabar said that IMIC had made its proposals very clear so its offer is already on the table. “It is a question of sitting down with the Afferro board and negotiating an agreement, which I expect will happen within a month,” he added.
Cailey Barker at Numis Securities said that he expected strong support for the deal now that the financing had been raised.
Afferro, which unlike many of its peers in the region still owns 100 per cent of its flagship asset, the Nkout iron ore project, has been in talks with several potential partners since late last year and disclosed an initial approach from IMIC in December.
IMIC, an investment company that targets projects and businesses in the resources sector, already owns almost five per cent of Afferro, Reuters data shows.
Afferro declined to comment.