Afferro Mining Inc. (AFF.L,AFF.V) and International Mining & Infrastructure Corporation plc (IMIC.L) announced that they have agreed terms in-principle for the proposed acquisition of Afferro by IMIC, subject to the completion of relevant documentation including satisfactory final financing arrangements, and the receipt of a fairness opinion from its financial adviser as to its terms of the proposed offer. Afferro said its board intends to recommend the proposed offer to its shareholders.
As per the agreed terms, IMIC will offer 80 pence in cash, plus a 2-year convertible loan note with principal value of 40 pence for each share of Afferro. This combination of cash and convertible loan notes, which values the current issued share capital of Afferro at about $190 million, replaced the three options proposed in IMIC's announcement dated 17 April 2013.
The convertible loan notes will carry a coupon of 8%, which will be rolled up and paid at the end of the 24 month term. Upon maturity, the notes together with any accrued interest will be paid in either cash or convert to the equivalent value in IMIC shares at the time of conversion, at IMIC's discretion.
On 17 April 2013, IMIC said Afferro shareholders would be given three options for receiving consideration in respect of their shares, namely: 80 pence in cash plus a convertible loan note of 20 pence, making a total of 100 pence for each Afferro share; or 50 pence in cash plus a convertible loan note of 70 pence, making a total of 120 pence for each Afferro share; or shares in IMIC equivalent to a valuation of 140 pence for each Afferro share. The cash portion in the options will be subject to a limit of $100 million.
IMIC today said it intends to acquire Afferro by way of a Plan of Arrangement in Canada which requires the approval of at least two thirds of Afferro's shareholders. In addition, the proposed acquisition of Afferro by IMIC will be subject to the approval of IMIC shareholders and the completion of the documentation required to implement a reverse takeover under the AIM Rules of the London Stock Exchange.
The Board of Afferro, which in aggregate holds 6.3% of Afferro's share capital, has confirmed that it will be voting in favour of the offer subject to the above conditions, as will IMIC, which holds 5% of the current issued share capital of Afferro.
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