CUDECO SWAPS SHARES FOR SERVICES
27 November 2012,
CUDECO (ASX: CDU) has entered an agreement to exchange $34.2 million in shares for services from Sinosteel Equipment and Engineering.
The placement of 7.6 million ordinary shares at $4.50 per unit is in lieu of cash payments for equipment from Sinosteel, says CDU director Wayne McCrae (pictured).
“The equipment includes the entire 22Megawatt Power Station manufactured by U.S. company Cummins Power, to provide the high voltage power station for the Rocklands Copper Project,” says McCrae in a statement to the ASX today.
“The supply agreement includes the complete installation, commissioning on site, including 12 months on site support.”
The remainder of the placement is for the erection and construction of the mineral process plant.
The market reacted positively to the announcement today, with CDU shares closing 6.19 per cent up at $4.630.
CuDeco recently cancelled a $30 million capital-raising venture and decided upon the share placement with Sinosteel instead.
“The Directors elected that this share in lieu of cash option, was a better option than the recent placement that was withdrawn at $4.30 per share,” says McCrae.
The agreement with Sinosteel is binding, but subject to the Foreign Investment Review Board approval process, which is expected to be completed by the end of this year.