Guest Contributor | Jun 9, 2021 | 0
Paladin to go ahead with independent Langer Heinrich valuation for solvent restructuring
Paladin Energy Limited has decisively won the first round in the value dispute with China National Nuclear Company over the Langer Heinrich uranium mine near Swakopmund.
Last week Paladin announced that it has now agreed, without any admission of the validity of China National Nuclear Company (CNNC)´s claims and without prejudice to its rights under the Langer Heinrich Mine (LHM) Shareholders´ Agreement, to allow an independent valuation process to move forward.
Information provided on the Namibia Stock Exchange news service said the valuation is the first step in a process that may lead to CNNC acquiring Paladin´s 75% interest in LHM.
According to the statement, Paladin made the decision to allow the valuation process to move forward having consideration for the expected valuation range for its interest in LHM and to shield stakeholders from a protracted and costly arbitration. Paladin’s is confident that subject to further engagement and support of key stakeholders, it may be able to propose an alternative solvent restructuring.
The valuation is to be performed by an independent international investment bank with uranium experience and is expected to take 5to 6 weeks.
“Under the LHM Shareholders´ Agreement, once the valuation is complete CNNC has 30 days to exercise the option. An acquisition of Paladin´s interest in LHM pursuant to the option would include the right to buy one or both of the Company´s shareholder loan of approximately US$251 million at its full face value; and [to acquire] its equity in LHM. A 5% discount to fair market value would apply to the equity portion,” according to the SENS statement.
Paladin reiterated that it retains the support of its stakeholders and is seeking to finalise an alternative restructuring proposal that can be put forward as a valid solvent restructuring to be implemented in the event CNNC acquires its stake in LHM.
Meanwhile, Paladin will continue to provide its stakeholders with material updates as soon as it is in a position to do so. It is intended that Paladin´s shares will remain in suspension until Paladin has resolved how it will progress any alternative restructure, including the scenario where Paladin no longer owns an interest in LHM.