US equity group invests in mine project

US-based private equity group Mount Kellett Capital Management LP will invest US$100 million in Masan Resources, an affiliate of HCM City-listed conglomerate Masan Group (MSN), the group announced yesterday.

Mount Kellett co-founder Jason Maynard said, “We have invested on the expectation that Masan Resources will ultimately become the leading resources platform in Viet Nam and Indochina.”

Masan Resources currently holds 100-per-cent ownership of the Nui Phao Mine. With approximately 55.4 million metric tonnes of proven and probable reserves of tungsten, fluorspar, bismuth and copper, the mine was expected to begin operations in January of next year and, once fully operational, generate over $300 million in revenues per year.

Upon completion of the current deal, Mount Kellett would hold a 20-per-cent stake in Masan Resources, while Masan Group would retain 64 per cent and Tiberon Minerals Pte Ltd 16 per cent. Masan Group has a call option to buy Tiberon’s stakes over the next three years for approximately $60-90 million.

Masan Group also has obtained an eight-year senior-secured lending facility with the Viet Nam Development Bank worth $120 million, significantly de-risking its position in the Nui Phao Mine. Full financial closure was expected by the end of the first quarter, with remaining funding to come from domestic banks and financial institutions. Total investment in the mine was expected to reach $440 million, of which $155 million has already been invested.

JP Morgan is serving as sole advisor to Masan Group on the Mount Kellett transaction. — VNS

Tags: Mount Kellett Capital Management LP