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International Finance Corporation to Buy a Stake in Aricom
International Finance Corporation on Tuesday announced plans to buy 7 percent in the Aricom iron ore firm for $40 million. The investments will cover more than a half of expenses for Aricom’s iron ore project in Russia’s Far East.
International Finance Group (IFC), a member of the World Bank Group, said on Tuesday it is going to invest $40 million in Aricom. $20 million is to be spent to buy stocks in Aricom’s additional share issue while the other half will buy warrants for the same number of stocks in the British company.
IFC’s board of directors still has to give the green light to the decision. The deal may be sealed in May. Aricom will use the money to develop its current project, the company’s director general Jay Hambro said in an interview with Kommersant.
Aricom Plc was set up two years ago by Peter Hambro Mining Plc. Aricom’s capitalization is $50 million. Peter Hambro and Pavel Maslovsky hold 32 percent in the firm. Aricom owns 49 percent in a project developing an ilmenite and magnesite deposit in Amur Region, Far East. The company is also currently developing several iron ore deposits in other regions in the Far East.
Aricom’s stocks went up 5.15 percent on Tuesday after the news, which will surely increase the company’s capitalization. More importantly, Aricom will be able to gain a broader foothold on the Russian iron ore market. Mr. Maslovsky earlier reported that at least $200 million is needed to develop the deposits in Far East. Aricom is now looking for $85 million for a project in Amur Region. The company’s prospects are excellent as the deposits’ location is ensuring constant demand from neighboring China which is in short of iron ore.
www.kommersant.com
All the Article in Russian as of Mar. 21, 2007
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