First Quantum holders tender 97.3% of 8¾% notes, 99.8% of 7½% notes for exchange so far

By Susanna Moon

Chicago, Feb. 10 - First Quantum Minerals Ltd. announced the early tender results in the 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, as previously noted.

Holders had tendered $1,449,304,000, or 97.3%, of the 8¾% notes and $498,813,000, or 99.8%, of the 7½% notes as of 11:59 p.m. ET on Feb. 7, the early tender date.

As a result, Akubra received enough consents to approve the proposed amendments to the note indentures and will execute supplemental indentures to the notes, according to a company press release.

The company said it expects to issue about $2,229,894,000 of new notes on Feb. 12.

The total purchase price will include an early tender premium for notes tendered by the early tender deadline.

The exchange offer will continue until 11:59 p.m. ET on Feb. 24. The offer began on Jan. 28.

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 needed to 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.

Exchange offer details

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 previous 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 had written the company or made legally binding commitments to exchange their notes under the offer.

Consent solicitation

First Quantum Minerals Ltd. said it also received the needed consents from holders of at least a majority of its 7¼% senior notes due 2019 by the end of the solicitation at 5 p.m. ET on Feb. 7. Holders needed to be of record as of Jan. 27.

The company expects to execute a supplemental indenture to the notes on Feb. 12, according to a separate press release.

The cash consent payment will be $10.00 per $1,000 in principal amount of notes.

As previously announced, the company sought 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 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 previously said.

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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