Timis scores a victory with £80m issue

David Hellier
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FRANK Timis, the controversial entrepreneur, yesterday announced an £80m fund-raising for African Minerals, a company where he is executive chairman.

The successful money-raising shows that Timis, despite his colourful background, retains strong City support.

Late last year Aim’s disciplinary committee levied its largest ever fine on Regal Petroleum for misleading investors about an oil find. Timis was chief executive of the group at the time.

But yesterday Timis celebrated with his advisers from Canaccord Adams and Mirabaud Securities as African Minerals reported that 20m new shares had been underwritten at a price of 400p each.

As part of the deal, China Railways Materials Commercial Corporation (CRM) is taking an option to subscribe to 14.4 per cent of the share placing at the placing price. In addition, CRM will subscribe for approximately 30.5m new common shares of African Minerals at 500p per share, for a cash consideration of approximately £152.6m representing 12.5 per cent of the enlarged issued share capital.

Also coming in as a substantial shareholder will be the Toronto-based Dundee Corporation which will invest £33.5m for a 7.9 per cent stake in the group.

The proceeds of the placing are to be used to commence construction of key infrastructure for the first part of the group’s iron ore project at Tonkolili in Sierra Leone.

“This fund raising, together with the conditional CRM equity deal and two off-take agreements, places the company in a very strong position to realise iron ore production from Tonkolili during the first quarter of 2011,” said Timis.

Some investors lost millions of pounds after investing in Regal, the group set up by Timis. Regal produced a series of misleading announcements between January and April 2004 relating to a failed Greek oil well that led to a fine of £600,000 on 17 November last year.

Shares in African Mineral closed the day up 10p at 420p.