Afferro has entered into an agreement for a US$190 million cash and paper bid from investment group IMIC. This agreement would be the stepping stone for the development of the iron ore project in the West African region.
Under the terms of the agreement, IMIC would pay 80 pence per Afferro share and would put in place a two year convertible loan note with a value of 40 pence as prinicpal. Afferro shares were valued at 70.5 pence per at Tuesdays close of market trading.
The IMC bid promises to lay to rest the infrastructure issues that have limited the development of the flagship iron ore project. The mine is located on the Nkout region in Cameroon. Aside from this agreement, Afferro has a standing secured partnership with a unit of China Railway Group.
According to Haresh Kanabar, chairman of IMIC, announced through a statement last Wednesday, "We believe that the combination of IMIC and Afferro is highly attractive in that it brings together Afferro's high quality iron ore assets with a deliverable infrastructure and offtake solution."
With the announcement, Afferro shares went up 11% in early trading while IMIC share values jumped 2%.
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