Standard Chartered Private Equity has invested up to A$80 million ($51.5 million) in the form of convertible unsecured notes into Straits Resources, a Perth-based mine developer and operator.
Founded in 1992, Straits Resources focuses on acquiring and developing assets within the gold, copper and bulk commodities sectors. Listed on the Australian stock exchange, the company controls and operates antimony, coal, copper and gold mines in Australia and Indonesia. It also has a portfolio of mining investments, development projects and exploration grounds throughout the two countries.
The funding will strengthen Straits Resources’ balance sheet, allowing it to continue with development plans. The company also hopes to close the gap between the “see through” value of its holding in Straits Asia Resources, a Singapore-listed subsidiary, and its current share price, in order to potentially dispose of its coal assets in Straits Asia Resources.
Alastair Morrison, global co-head of Standard Chartered Private Equity, will take a seat on the company’s board.
The capital injection comprises a first tranche of A$48.6 million and a second tranche of $32.1 million, which is subject to shareholder and Australia’s Foreign Investment Review Board approval. The four year term notes each have a face value of A$1.45, a 53 percent premium on Straits Resources’ closing share price at the end of January.
The company has also obtained a $25 million loan from Standard Chartered Bank for a period of 18 months. At the same time, it “continues discussions” with other banks, to which it owes A$50 million in debts that mature at the end of March.
Standard Chartered Private Equity focuses on mid- to late stage companies and management buyouts across a range of industries. The firm typically invests between $10 million and $50 million per deal, and targets businesses based in and operating in Greater China, Korea, Southeast Asia and India.
Standard Chartered Private Equity and Straits Resources did not respond to requests for comment by press time.