Masan Group raises $100 million from Mount Kellett

Masan Group Corporation (MSN), one of Vietnam’s largest private sector business groups, announced on January 24 the successful investment from funds advised by Mount Kellett Capital Management LP, a multi-billion dollar US-based private equity group, into Masan Resources.

As part of the transaction Mount Kellett will invest $100 million for a 20 per cent stake in Masan Resources. Masan Group will own 64 per cent, while Tiberon Minerals Pte Ltd and Mount Kellet will hold a 16 per cent and 20 per cent equity stake in Masan Resources, respectively.

Masan Group, however, has a call option to buy Tiberon’s stake over the next three years for approximately $60-90 million. In addition, Masan Resources now has 100 per cent beneficial ownership over the Nui Phao mine.

Jason Maynard, co-founder of Mount Kellett, commented, “We have invested on the expectation that Masan Resources will ultimately become the leading resources platform in Vietnam and Indochina as a whole.”

In addition, Masan signed an agreement with Vietnam Development Bank (VDB) for an 8-year senior secured facility up to $120 million. Masan has significantly de-risked the Nui Phao mine by raising a total of approximately $220 million from Mount Kellett and VDB.

Madhur Maini, CEO of Masan Group, commented, “We have two very successful verticals, consumer and financial services, and we continue to execute on our strategy to build Masan Resources into a leading private sector resource company in Vietnam.”

Nui Phao is a polymetallic mine with approximately 55.4 million metric tonnes of proven and probable reserves estimated by independent specialists Aker Kvaerner and an expected mine life of over 16 years.

The mine has a tungsten grade of 0.21 per cent, fluorspar grade of 8.46 per cent, bismuth grade of 0.09 per cent and copper grade of 0.19 per cent. Located in northern Thai Nguyen, the Nui Phao mine is open-pit, with a low strip ration of 2.1:1, making it one of the lowest cost producers of tungsten in the world.

Masan Resources has made considerable progress recently in the development of the asset including completing over 80 per cent of the compensation and resettlement for the land required for construction – approximately seven months ahead of schedule

The Nui Phao mine is well on track to commence operations in January 2013 and once fully operational, the mine is expected to generate over $300 million in revenue. – VIR

Tags: Masan Group, Mount Kellett