Mining group Xstrata shareholders approved a $ 5.9bn rights issue on Monday

Mining group Xstrata shareholders approved a $ 5.9bn rights issue on Monday that the company could repay the debt, but also voted for the acquisition of a coal mine in Colombia.

Xstrata, the world fifth largest diversified mining group by market value, has announced plans to release the highly discounted new shares at 29 January, which will triple its shares in circulation.

An extraordinary general meeting in Switzerland, Xstrata has agreed to release the 1.96 billion new shares at 210 pence share, said in a statement.

The price of a 66% discount on the closing stock price on the day before the initial announcement.

Xstrata shares fell 8% to 640 pence at midday, compared to 5% decline in the UK mining index.

Shares will be “ex-rights on Tuesday and the theoretical ex-rights price is 348 pence, Xstrata said.
The meeting also gave approval for the $ 2 billion purchase Prodeco coal mine in Colombia, with Xstrata’s largest shareholder, Swiss commodities trader Glencore.

Some shareholders expressed dissatisfaction with the Prodeco the transaction, which was organized in such a way that Glencore could use the assets instead of cash to participate in the mobilization of resources and the preservation of 35% of the shares.

The resolution was approved on Prodeco 80% of the voting shares, and three other resolutions on the rights issue received 95% approval.

Xstrata and Glencore could not agree on a price for Xstrata Prodeco so the opportunity to Glencore would allow it to redeem minutes a year later.

After the fund-raising, Xstrata net debt was due to fall $ 12.6bn from $ 16.3bn at the end of 2008, while the channel will decrease to less than 30% of 40%.

The issue of human rights is fully guaranteed by Glencore and the investment banks Deutsche Bank and JP Morgan.

(worldminingexplorationnews)