Cathay Fortune Corp has proposed a new bid for Discovery Metals on the condition that Discovery stops its plans to raise funds through equity sales. Acccording to a Reuters report, the Chinese private equity firm established by Chinese billionaire Yu Yong is seeking to purchase the copper miner for its Botswana Boseto project.
The firm said that the Brisbane Australia based miner would be risking going into bankruptcy and receivership with its current plan and questioned the competence of the current Discovery board.
According to a letter sent by Cathay Fortune to the board, "CFC is willing to put a binding cash proposal to the Board to acquire Discovery subject to the proposed equity raising not proceeding."
A spokesperson for Cathay said that there was no position taken as to the pricing of the offer as there is still a need to conduct a due diligence review of the current state of Discovery Metals. He said, "The reason is that Cathay has lost confidence in the board and their public disclosures, and wants to do a short period of due diligence ahead of putting a more formal proposal to the company."
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