Eastern Field is now Finders’ biggest shareholder; hostile bid goes unconditional
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Eastern Field Developments has made its hostile takeover bid for junior copper miner Finders Resources unconditional after raising its stake to almost 25 per cent.
The suitor is now Finders’ largest shareholder.
“The time has come to draw a line in the sand,” Eastern Field director David Fowler told investors.
“We announced our intention to takeover Finders Resources five months ago. Finders has had ample time to secure a white knight but the reality is that no alternate bidders have emerged.”
The comments come on the back of media reports that China’s Fosun International had walked away from takeover talks with Finders.
Following the news Finders shares slipped back to 22c, below Eastern Field’s cash offer.
Eastern Field — which comprises Provident Minerals, Indonesian investment firm Saratoga and Indonesian copper-gold miner Merdeka — tabled its 23-cent-per-share off-market offer in October.
The suitor said it launched its bid after Provident completed a formal sale process for its Finders stake that attracted “little interest and no offers”.
The group has flagged concerns over the short mine life of the Wetar operation in Indonesia and production and cost guidance downgrades.
“The operational performance at Wetar is well below shareholders’ expectations and, as a result, Finders’ balance sheet is under significant pressure as demonstrated by its small cash balance,” Mr Fowler said.
Finders had cash flows of $27.4 million for the December quarter. The company’s cash balance was $13.8 million and it had $77.5 million in outstanding loans. Finders’ estimates a cash burn of about $44.6 million in the current quarter.
While copper output was expected to be at the bottom of the 4000 to 5000 tonne target for the December quarter, Finders’ boss Barry Cahill told Stockhead previously that the company is seeing improvements in production.
“We’ll get back up to where we were, and we’ll get back to making $US20 million EBITDA a quarter, which is what we were doing, and pay off the debt and repatriate funds and pay a dividend. So that’s still our target.”
The Wetar mine was producing over 6000 tonnes of copper previously. Finders is on track to meet its target by the end of the March quarter.