Royal Bank of Canada-RFC combinethreatens Minmetal's bid for OZ Minerals

06 June 2009

Melbourne-based copper-and-gold miner OZ Minerals Ltd,  received a $1.22- billion recapitalisation proposal late last night from RFC Corporate Finance, an Australian investment-and-advisory business, and RBC Capital Markets, an investment-bank unit of Royal Bank of Canada.

The combine has proposed raising $1 billion in equity and convertible bonds and a further $220 million under a working-capital facility for OZ Minerals.

The company had earlier obtained all the necessary approvals from the Australian and Chinese authorities for the sale of a major portion of its assets to China's Minmetals at a cost of $1.5 billion, (See: OZ Minerals-Minmetal deal gets final Chinese nod).

A spokeswoman for OZ Minerals said it will consider the joint proposal. The company, in a  statement to the Australian Stock Exchange said on Thursday that it had not received any superior offer to the China Minmetals, saying that the reports were media speculation. (See: OZ Minerals refutes 'superior bid' reports). 

However, later in the day, RFC Corporate Finance and RBC Capital have come out with a joint statement saying that they are in the fray and their proposal is superior in value to that of Minmetals.

"The combined equity and bond issue will allow OZ Minerals to refinance its debt while keeping its portfolio of attractive assets in the hands of its own shareholders," the companies said.