THE QATARI sovereign wealth fund is investing $775m (£497m) in European Goldfields, the London-listed company behind one of the biggest gold-mining projects in Greece, in a move that marks a major boost for the debt-laden country.
Qatar Holding, the investment arm of the Qatar Investment Authority which also owns Harrods, will provide a $600m loan facility that will allow European Goldfields to push ahead with production at its three key mines.
In July, Greece granted European Goldfields a long-awaited permit that allows it to mine for gold in the north of the country, a move set to turn the London-based firm into the European Union’s largest primary gold producer.
The deal was announced after Qatar’s Emir Sheikh Hamad bin Khalifa al-Thani met Prime Minister George Papandreou in Athens this weekend.
“Qatar’s investments show trust in the Greek economy,” Papandreou told a news conference after the meeting.
The first gold is expected next year and the project will bring more than 1,500 jobs in the north-east of the country.
Under the agreement, European Goldfields’ shareholders will also be offered a further $150m of loan notes, with the rights for Qatar to eventually take up 20 per cent in the company if the loans are taken up and other options exercised.
Qatar Holding has also bought a 9.9 per cent stake in European Goldfields from an existing shareholder, the Greek building firm Ellaktor.
The deal marks the second major investment in Greece by Qatar Holding in two months after the Gulf state struck a deal in August to provide funding for a merger of two of the recession-hit country’s largest banks.
Ahmad Mohamed Al-Sayed, chief executive of Qatar Holding, said: “Our latest investment helps to further diversify our investment portfolio in the commodities sector, with a specific position in gold resources and another long-term partner secured for the future.”
MEET THE ADVISERS
Liberum Capital was appointed nominated adviser to European Goldfields when the gold miner listed on the alternative investment market (Aim) in 2004, with Michael Rawlinson leading the team.
Rawlinson, a well-known name in mining circles, began his career with the now-defunct merchant bank Flemings, before joining Cazenove after its merger with JP Morgan, where he rose through the ranks and was made partner.
He worked on the initial public offerings of a number of natural resources companies including Billiton, Xstrata, Vedanta and Anglo American.
Rawlinson also advised Anglo-Swiss miner Xstrata on its $18bn acquisition and $12bn financing of their acquisition of Falconbridge, the Toronto-based nickel and copper company in 2006.
More recently Rawlinson’s expertise in the sector ensured that Liberum was granted a role in advising Glencore on its giant IPO. Rawlinson sits on the board of Liberum and heads the boutique investment bank’s mining, resources and energy division.
Lazard & Co.’s metals and mining team was appointed as financial advisers to European Goldfields on its deal with Qatari Holding.