U.S. News

Jiangxi Copper to Place About 4 Billion Yuan of Shares

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Jiangxi Copper said on Tuesday it planned to raise about 4 billion yuan ($517 million) by placing up to 290 million new A shares with as many as 10 institutional investors.

China's top integrated copper producer will use the proceeds to buy mining and other assets valued at 1.79 billion yuan from its controlling shareholder, Jiangxi Copper Corp., which will take 44.63 percent of the placement.

The offer, which needs shareholder and regulatory approval, comprises about 9% of the company's expanded share capital.

It will be priced at no less than 90% of the shares' average market price on the last 20 trading days, Jiangxi Copper said. That implies a minimum price of about 13.78 yuan. The shares have been suspended since March 6.

The trade will resume on Tuesday. The company's shares have dropped about 2.1% so far this year to HK$7.74 prior to the suspension.

Jaingxi Copper said the cash from the placement would be used to finance expansion of Chengmenshan Copper mine, the technology renovation at Yongping Copper Mine and Fujiawu Copper Mine and the expansion at Wushan Copper Mine by 5,000 tons a day.

It will also finance expansion of copper recovery from slag, expansion of anode mud treatment and utilization of heat recovered from the smelting process, Jiangxi said in a statement.

International copper prices climbed by nearly 30% to $6,620/$6,625 a ton in the past year, partly due to strong demand for the red metal from China, although the price was 25% lower than the peak of $8,790 hit last May.