High River Gold says Russia's OAO Severstal to make bid for company
Fri May 22, 3:30 PM
The Canadian Press
ca.news.finance.yahoo.com
By The Canadian Press
TORONTO - High River Gold Mines Ltd. (TSX: HRG.TO) shares lost some of their recent gains Friday after the debt-challenged mining company announced Russian company OAO Severstal has indicated it will offer 18 cents a share to buy out minority shareholders.
The company's battered stock, which has risen in recent days but remains well below where they were a year ago, fell to 18 cents at mid-afternoon Friday - down five cents from the previous close but still up for the week.
The two companies have been holding talks without coming to a mutual agreement and High River's board remains non-committal.
A special committee of independent directors will oversee discussions with Severstal and evaluate any formal proposal that may be made, the company said Friday.
"Following an independent analysis by High River of its liquidity position and a review of financing and strategic alternatives, on May 19, 2009 Severstal indicated to the board of High River, by way of non-binding expression of interest, that it proposes to make a cash offer of C$0.18 per share to minority shareholders in High River."
"There can be no guarantee that such an offer will ultimately be made at this stage."
Severstal has already provided financial support to Toronto-headquartered company, which has operations in Russia and Africa, including a US45-million private placement last November.
In addition, US$27 million in two loans owed by High River - now in default - have were assigned in April by Standard Bank PLC to Severstal, which has given High River more time to arrange a solution.
High River is also on the hook to repay US$15 million to its lenders in May and June. |
