First Quantum begins exchange offer, consent bid after Inmet buyout

By Susanna Moon

Chicago, Jan. 28 - First Quantum Minerals Ltd. said it began an exchange offer for the 8¾% senior notes due 2020 and 7½% senior notes due 2021 issued by Inmet Mining Corp., now FQM (Akubra) Inc., or Akubra.

In exchange, the company is offering to issue 6¾% senior notes due 2020 and 7% senior notes due 2021.

The offer is part of the company's objective to achieve pari passu ranking and credit support among all classes of its capital markets debt, and it is part of the company's plan to streamline its capital and financing structure after the acquisition of Inmet Mining, according to a press release by First Quantum.

As part of the payment for the exchange, Akubra is soliciting "customary exit consents" to amend the note terms to remove substantially all of the negative covenants, as well as a waiver of any past defaults and claims against Akubra and the company.

Holders of about 45.5% of the notes and 44.2% of the 7½% notes have written the company or made legally binding commitments to exchange their notes under the offer, the press release noted.

Exchange offer

The total purchase price will include an early tender premium for notes tendered by 11:59 p.m. ET on Feb. 7, the early tender date.

The exchange offer will end at 11:59 p.m. ET on Feb. 24.

Holders who tender their notes must consent to the proposed amendments and they may not deliver consents to the proposed amendments without tendering their notes.

The company must secure consents from holders of at least a majority of each series of notes in order to amend the notes and execute supplemental note indentures.

Consent solicitation

First Quantum Minerals Ltd. also began a consent solicitation to amend its 7¼% senior notes due 2019, according to a separate press release.

By soliciting the consents, the company is seeking to more closely align the covenants included in the indenture and the covenants included in the new note indentures to be issued by the company in the exchange offer.

The company will make a cash payment of $10.00 per $1,000 principal amount of notes.

If the needed consents are obtained, the proposed amendments will increase the amount of investments that the company can make and the amount of secured and unsecured debt that the company can incur under the note indenture, the company said.

The solicitation will end at 5 p.m. ET on Feb. 7. Holders must be of record as of Jan. 27.

D.F. King & Co., Inc. (212 269-5550 or 800 769-7666) is the information agent for the exchange offer and consent solicitation.

First Quantum is an international mining company based in Vancouver, B.C.

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