trending Market Intelligence /marketintelligence/en/news-insights/trending/dqD8x8jczsdjEeGU4jCTaw2 content esgSubNav
Log in to other products


Looking for more?

Contact Us
In This List

Champion Iron buying out Quebec's Bloom Lake mine stake in C$211M deal


Essential Metals & Mining Insights, April 2021


Climate Credit Analytics: Linking climate scenarios to financial impacts


Global M&A Infographic Q1 2021


COVID-19 Impact & Recovery: Private Equity

Champion Iron buying out Quebec's Bloom Lake mine stake in C$211M deal

Champion Iron Ltd. unit Québec Iron Ore Inc. entered into an agreement in principle with la Caisse de dépôt et placement du Québec for a preferred share offering of C$185 million and a commitment for a fully underwritten US$200 million credit facility with The Bank of Nova Scotia and Societe Generale.

The company said May 29 that it will use the proceeds to fund strategic initiatives and refinance the unit's current outstanding credit facilities.

Additionally, the company entered into an agreement with the Quebec government to acquire Ressources Québec Inc.'s 36.8% equity interest in Québec Iron for C$211 million, which will increase Champion's stake in the Bloom Lake iron ore project in Quebec to 100%.

The investment is subject to Champion issuing 15 million warrants with an exercise price of C$2.45 each and a seven-year term, among other things.

The loan facility consists of a US$180 million senior secured fully amortizing nonrevolving credit facility and a US$20 million senior secured revolving credit facility, which will mature in five years and three years, respectively.

Champion CEO David Cataford said modifying the company's capital structure will provide substantial cost savings. The new weighted average cost of debt ranges between 6.88% and 7.67% depending on the company's EBITDA, compared to a weighted average cost of between 12.37% and 14.75% for the facilities used to fund the Bloom Lake restart in October 2017, according to the release.

The transaction, anticipated to be completed during the summer, is expected to add about 2.75 million tonnes per annum to the company's share of high-grade iron ore production and will be funded from proceeds of the newly refinanced facilities in addition to cash on hand.