Langer Heinrich company value seen at $583 million

25 July 2017

Independent experts have determined the fair market enterprise value of the Langer Heinrich uranium mine's holding company to be $583 million, Paladin Energy has announced. Separately, Paladin said the administrators it appointed earlier this month have agreed a new financing facility that will fund working capital for the Namibian mine.

The process to determine the fair market value of Paladin's share of Langer Heinrich was triggered at the request of China National Nuclear Corporation subsidiary CNNC Overseas Uranium Holding in March, the first step in a process towards CNNC exercising an option to acquire Paladin's 75% share of the Namibian mine. CNNC Overseas bought a 25% joint venture equity stake in Langer Heinrich for $190 million in January 2014.

The fair market enterprise value for Langer Heinrich Mauritius - the holding company of the Langer Heinrich uranium mine in Namibia - would result in a fair market price for Paladin's share of the company's capital of $170 million, Paladin said. Taking into account a discount of 5% to which CNNC would be entitled under a shareholder's agreement, this would mean Paladin would receive about $162 million for its shares.

Outstanding interest-bearing loans from Paladin Finance to Langer Heinrich Uranium were worth about $245 million as of 30 June. If CNNC were to exercise its potential option and acquire the loans, Paladin would ultimately be entitled to receive about $416 million, it said.

CNNC has 30 days from 20 July to notify Paladin if it intends to exercise its option.

Finance facility

Western Australia-based Paladin in February announced plans for a balance sheet restructuring to enable it to meet debts, after earlier plans to sell a 24% stake in Langer Heinrich to CNNC had failed to progress. The company appointed administrators on 3 July when it was unable to delay to the repayment of a $277 million debt to Electricité de France.

The administrators - Matthew Woods, Hayden White and Gayle Dickerson of KPMG - have now entered into agreements that will see Deutsche Bank AG's London Branch acquire an existing credit facility from Nedbank. The facility will be increased from $20 million to $60 million, and will fund working capital for the mine. The facility will also "meet the general corporate purposes of the Paladin group".

Paladin's shares are to be delisted from the Toronto Stock Exchange (TSX) on 10 August, due to the company's failure to meet the exchange's requirements for continued listing. The administrators will seek to transfer the TSX register to the Australian Stock Exchange (ASX) as part of any proposal that results in the company retaining its ASX listing, Paladin said.

Researched and written
by World Nuclear News