Katanga Mining announces settlement of DRC Legal Dispute with Gécamines and Agreement for the Resolution of KCC’s Capital Deficiency
Baar, Switzerland, 12 June 2018
Glencore refers to the announcement today by Katanga Mining Limited ("Katanga") in which it announced the settlement of the DRC legal dispute with La Générale des Carrières et des Mines (“Gécamines”) and an agreement for the resolution of the capital deficiency at Katanga’s 75% owned DRC operating subsidiary Kamoto Copper Company ("KCC").
Glencore is pleased that this matter has now been resolved and looks forward to supporting KCC’s closer partnership with Gécamines as the parties work together to ensure that the Joint Venture reaches its full potential for the benefit of all stakeholders.
The key highlights of Katanga’s settlement agreement with Gécamines are as follows:
- Conversion of US$5.6 billion of KCC's total debt of approximately US$9 billion into new KCC equity such that, with retroactive effect as at January 1st, 2018, KCC has $3.45 billion of debt to KML Group, bearing interest at the lower of US$ Libor 6 month + 3% and 6% per annum;
- Katanga and Gécamines’ shareholdings in KCC remain unchanged at 75% and 25% respectively;
- a one-time payment to Gécamines of US$150 million relating to historical commercial disputes;
- certain amendments to the dividend payment and free cash flow provisions of KCC including an amortization schedule for the repayment of the residual debt;
- payment of approx. $US 41 million to Gécamines in relation to outstanding expenses incurred as part of an exploration program;
- waiver by KCC of its entitlement (or financial equivalent) to replacement reserves and associated incurring of drilling costs on Gecamines' behalf, amounting to US$285 million and US$57 million respectively, and
- withdrawal of all legal action by Gécamines.
The entry of the settlement agreement between Katanga and Gécamines constitutes a smaller related party transaction as defined in Listing Rule 11.1.10 because Gécamines holds more than 10% of the voting rights in a material subsidiary of Glencore. Accordingly, as a condition precedent to the Settlement Agreement becoming effective, Glencore must obtain written confirmation from a sponsor that the terms of the Settlement Agreement with Gécamines are fair and reasonable as far as the shareholders of Glencore are concerned. Glencore aims to obtain such written confirmation on or before 14 June, 2018.
For further information please contact:
t: +41 41 709 24 62
m: +41 79 904 33 20
t: +41 41 709 2880
m: +41 79 737 5642
t: +41 41 709 2714
m: +41 79 543 3804
Glencore LEI: 2138002658CPO9NBH955
This announcement contains inside information.
Notes for Editors
Glencore is one of the world’s largest global diversified natural resource companies and a major producer and marketer of more than 90 commodities. The Group's operations comprise around 150 mining and metallurgical sites, oil production assets and agricultural facilities.
With a strong footprint in both established and emerging regions for natural resources, Glencore's industrial and marketing activities are supported by a global network of more than 90 offices located in over 50 countries.
Glencore's customers are industrial consumers, such as those in the automotive, steel, power generation, oil and food processing sectors. We also provide financing, logistics and other services to producers and consumers of commodities. Glencore's companies employ around 146,000 people, including contractors.
Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the International Council on Mining and Metals. We are an active participant in the Extractive Industries Transparency Initiative.
The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities. In this document, “Glencore”, “Glencore group” and “Group” are used for convenience only where references are made to Glencore plc and its subsidiaries in general. These collective expressions are used for ease of reference only and do not imply any other relationship between the companies. Likewise, the words “we”, “us” and “our” are also used to refer collectively to members of the Group or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.