BNamericas reported that the total value created for Chilean state copper giant Codelco in its agreement announced Thursday with Anglo American over the latter's assets in central Chile amounts to USD 4.09 billion.
Mr Thomas Keller CEO of Codelco said that "For Codelco it is a very good agreement. The deal marks the first acquisition in Codelco history. The two companies have been in talks since May seeking an out of court settlement of their dispute over a 1978 option agreement that would allow Codelco to purchase 49% stake in Anglo American Sur which includes the Los Bronces copper mine, adjacent to Codelco's Andina.
Mr Keller said that negotiations were difficult at first but both sides became more flexible as the process progressed. Each side must be willing to cede something in negotiations but we as a board are very comfortable with this agreement.
The two companies today enjoy a very good relationship, opening the door to the possibility of future projects to exploit synergies in the Los Bronces Andina area, he added.
The Agreement;
Apart from the 24.5% stake that Codelco will acquire in AAS for USD 1.7 billion a discount of USD 775 million compared to the price contemplated in the original option agreement Anglo American will transfer two mineral property groups to Codelco, Los Leones and Profundo Este, which are adjacent to the Andina mine and according to third party reports worth some USD 400 million.
Keller said that the 24.5% stake is actually worth USD 5.39 billion. How much have we paid for this stake USD 1.7 billion. We are talking about a gain of USD 3.69bn for Codelco. To that we add USD 400 million the approximate value for the two groups of mineral properties."
In addition, Anglo and Codelco have signed a shareholder pact in which Codelco obtains certain rights in the management of AAS that were not contemplated under the original option agreement.
Among the rights are a guaranteed minimum flow of dividends, a financing policy whereby AAS must try to access debt markets before deciding that the partners must put up capital for investments and certain political rights for Codelco, like a right to veto certain important decisions.
Mr Keller said that it is hard to assign a value to these rights but that he personally believes they are among the biggest achievements of the negotiation process. Meanwhile, Mitsui with which Codelco has entered a 83:17 JV for its stake in AAS has agreed to extend Codelco a long-term loan of USUSD 1.863 billion to be paid back with dividends Codelco receives from AAS. We consider that to be a highly satisfactory outcome."
Source - Business News Americas
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