Langer Heinrich mine valued at $583m

1 August 2017

Australia-based Paladin Energy, which recently appointed administrators, announced on 25 July that independent experts had determined the fair market enterprise value of the Namibian Langer Heinrich uranium mine's holding company to be $583m.

Paladin also said the administrators had agreed on a new financing facility that will fund working capital for the mine. The process to determine the market value of Paladin's share of Langer Heinrich was triggered in March at the request of China National Nuclear Corporation subsidiary CNNC Overseas Uranium Holding. It was the first step towards CNNC exercising an option to acquire Paladin's 75% share of the Langer Heinrich. CNNC Overseas bought a 25% stake in the mine for $190m in January 2014.

Paladin said the fair market enterprise value for Langer Heinrich Mauritius – the holding company of the mine – would result in a fair market price for its share of the company's capital of $170m. Taking into account a discount of 5% to which CNNC would be entitled under a shareholder's agreement,  Paladin would receive about $162m for its shares. Outstanding interest-bearing loans from Paladin Finance to Langer Heinrich Uranium were worth about $245m at the end of June. If CNNC exercises its potential option and acquires the loans, Paladin would ultimately be entitled to receive about $416m, it said.

CNNC has 30 days from 20 July to notify Paladin whether it plans to exercise its option.

Paladin in February announced plans for a balance sheet restructuring to enable it to meet debts, after earlier plans to sell a 24% stake in Langer Heinrich to CNNC fell through. The company appointed Matthew Woods, Hayden White and Gayle Dickerson of KPMG as administrators on 3 July, when it was unable to delay repayment of a $277m debt to Electricité de France. The administrators  have now entered into agreements that will see Deutsche Bank AG's London Branch acquire an existing credit facility from Nedbank. This will be increased from $20m to $60m, and will fund working capital for the mine.

Photo: Langer Heinrich (Credit: Paladin Energy)

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