UPDATE 2: 11:05 p.m. ET 9/10/2023: Indonesia heavy-equipment distributor PT United Tractors Tbk, a subsidiary of Jardine Matheson, is in talks with at least three banks to raise approximately $1 billion through a three-year syndicated loan, primarily to finance the company’s acquisition of a 19.99% stake in ASX-listed Nickel Industries Ltd., said a source close to and a source familiar with the matter.
Nickel Industries’ shareholders approved the acquisition at an EGM on Sept. 8,
as reported. The proposed placement was originally
announced on June 9.
Separately, Nickel Industries is also in talks with onshore and offshore banks for project financing for its Excelsior Nickel Cobalt, or ENC, project in Central Sulawesi, Indonesia, according to the sources.
As
reported, United Tractors, through its subsidiary PT Danusa Tambang Nusantara, or DTN, will acquire a 19.99% stake in Nickel Industries via a conditional share placement for approximately AUD 943 million ($602.1 million). In addition, the partnership also covers an agreement for DTN to acquire a 20% stake in the ENC Project, which is subject to completion of a feasibility study and Nickel Industries making a final investment decision.
In its second quarter 2023 activities
presentation, Nickel Industries stated that the ENC Project will cost $2.3 billion with construction to commence in the fourth quarter of 2023 and commissioning within 24 months. Assuming United Tractors’s 20% participation in ENC, Nickel Industries will hold a 55% stake in the project, while Shanghai Decent, a subsidiary of Tsingshan Holding, will own the remaining 25%.
United Tractors declined to comment. Nickel Industries did not respond to a request for comment.
--Tito Summa, Sarah Yuniarni
UPDATE 1: Nickel Industries Shareholders Approve 19.99% Share Placement to United TractorsUPDATE 1: 10:33 p.m. ET 9/10/2023: Nickel Industries
announced to the ASX on Sept. 8 that shareholders at an EGM on the same day approved a proposal to issue 857 million shares at AUD 1.1 ($0.7) a share to PT Danusa Tambang Nusantara, a subsidiary of Indonesian heavy equipment distributor PT United Tractors Tbk. The shares will represent around 19.99% of the company’s total ordinary shares following completion of the placement, according to an earlier
announcement. Shareholders also approved increasing the maximum number of board members to 12 from the current 10.
Original Story 1:26 a.m. UTC on June 9, 2023Nickel Industries Announces 19.99% Conditional Placement to United Tractors’ Subsidiary for AUD 943M; To Co-Invest 20% in Excelsior Nickel Cobalt ProjectNickel Industries
announced to the ASX today, June 9, that the company has established a strategic partnership with United Tractors, or UT, one of Indonesia’s largest heavy equipment distributors and mining services providers.
UT, through its subsidiary PT Danusa Tambang Nusantara, or DTN, will in turn become a substantial shareholder of Nickel Industries with a 19.99% stake through a conditional share placement. DTN subscribed to 857 million of Nickel Industries’ new shares at AUD 1.1 per share, raising proceeds of AUD 943 million ($631 million), representing a 27.2% premium to Nickel Industries’ last traded price, according to the announcement.
UT will have the right to appoint a director to Nickel Industries’ board upon completion of the subscription agreement. The conditional placement is contingent on Nickel Industries’ shareholder approval and completion of the 10% stake in PT Huayue Nickel Cobalt, on or before Sept. 29, 2023. Completion of the share placement is expected to occur in the third quarter of 2023.
Nickel Industries and DTN have also executed a collaboration agreement covering the former making a conditional 20% direct investment in the Excelsior Nickel Cobalt, or ENC project in Indonesia, as well as other potential future nickel mining and processing initiatives in that country. The collaboration agreement is subject to certain conditions precedent -- including completion of a feasibility study and Nickel Industries making a final investment decision to proceed with the ENC project.
The company will explore various options to raise third-party debt to partially fund the ENC venture and no further equity issuance is required to fund the project, the announcement states.