Equipment & Technology, Logistics, Ports & Terminals, Mining and Heavy Industries

Moly-Cop float on the table for Arrium lenders

Arrium operates in the mining and mining consumables manufacturing sectors.

A $1.5 billion initial public offering for mining consumables manufacturer Moly-Cop is reportedly being considered by lenders of the bankrupt South Australian steelmaker Arrium.

Administrators are looking to use Moly-Cop, the major Arrium subsidiary viewed by many as the crown-jewel of the business, to counter the significant debt piled up by the steelmaker before it went bankrupt recently.

KordaMentha, appointed as administrators on April 12, said on May 23 that it would hire an investment bank to help sell off Arrium’s Whyalla steelworks, port and mining operations, its manufacturing and distribution assets, and Moly-Cop.

“The Arrium Group of companies are expected to attract genuine interest from numerous credible local and international parties, many of whom have already contacted KordaMentha to register their interest,” the administrator said on May 23.

“A global investment bank will be appointed shortly to advise on the sale of Moly-Cop.”

According to a report in the AFR on Wednesday, that investment bank may recommend Moly-Cop be sold through an initial public offering, worth as much as $1.5 billion.

The Fairfax paper is reporting a number of banks – bidding with KordaMentha for the sell-side mandate on Arrium – have pitched the idea of floating Moly-Cop as a spin-off entity on the ASX.

Lenders are likely to find this an appealing option as they would be able to keep ownership of a small portion of the company, while liquidating their remaining stake to make up for the money they are owed.

Reported names in the had to run the sale include UBS, Lazard, Citi, Credit Suisse, Goldman Sachs and JPMorgan.

Leave a Reply

Send this to a friend