Qatar is getting Greek gold for a steal. The financing offer to European Goldfields (EGU-T) will buy the world’s richest country at least 27 per cent of the Canadian miner for a fraction of its mooted July valuation. But the company’s shareholders will have to think hard before turning down Qatar’s audacious near-$1-billion (U.S.) foray into gold.
A seven-year $600-million secured loan facility will finance European Goldfields’ entire project portfolio, focused on mines located in recession-hit Greece, at 7 per cent over Libor (London Interbank Offered Rate). For daring to lend where no Western bank would dare, Qatar will receive warrants worth almost 17 per cent of European Goldfields on a pro-forma basis.
Qatar also bought a further 9.9 per cent of shares from a subsidiary of indebted Greek construction firm Ellaktor and another shareholder for around $173-million. At $9.5 a share, that values European Goldfields at less than $75 per ounce of its 24 million ounces of gold equivalent resources. A developed miner like rival Randgold Resources trades at several times that amount.
No comments:
Post a Comment