NOT FOR DISSEMINATION IN THE UNITED STATES OR TO UNITED STATES NEWSWIRE SERVICES
BAAR, Switzerland, May 07, 2019 (GLOBE NEWSWIRE) -- On May 6, 2019, Glencore AG (“Glencore”), a wholly-owned subsidiary of Glencore plc, entered into a standby purchase agreement (the "Standby Purchase Agreement”) with PolyMet Mining Corp. (“PolyMet” or the “company”) contemplated by the previously disclosed extension agreement between PolyMet, Glencore and Poly Met Mining Inc. (a wholly-owned subsidiary of PolyMet). The Standby Purchase Agreement was entered into in connection with a rights offering (the “Rights Offering”) described in PolyMet’s news release of May 7, 2019.
Pursuant to the Standby Purchase Agreement, Glencore, subject to certain terms and conditions and limitations, has agreed to exercise its basic subscription privilege in full and to also purchase at the exercise price (the “Rights Price”) under the Rights Offering, that number of Common Shares of PolyMet (“Common Shares”) equal to the difference, if any, between (x) the total number of Common Shares offered pursuant to the Rights Offering and (y) the number of Common Shares subscribed for pursuant to the basic subscription privilege and the additional subscription privilege (the “Standby Commitment”). As a result, subject to the terms, conditions and limitations of the Standby Purchase Agreement, the Rights Offering will be fully backstopped by Glencore. The Rights Offering and Glencore’s ability and obligation to participate in the Rights Offering, including in respect of the Standby Commitment, will be conditioned on the receipt of all necessary clearances under the U.S. Hart-Scott-Rodino Antitrust Improvements Act and satisfaction of other conditions contained in the Standby Purchase Agreement. Glencore will be entitled to a fee (the “Standby Fee”) at the closing of the Rights Offering of approximately US$7.7 million which is equal to 3.0 percent of the total funds committed by Glencore.
Further details concerning the Rights Offering, including the terms of the Standby Purchase Agreement, are contained in the company's preliminary short form prospectus available on the company's SEDAR profile and in the company’s Form F-10 filed with the SEC on EDGAR (available at www.sec.gov). The foregoing description of certain terms of the Standby Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such agreements to be filed by PolyMet under its profile at www.sedar.com and with the Form F-10 filed with the SEC.
Summary of Glencore's Current Holding of PolyMet
Glencore currently holds 92,836,072 Common Shares, representing approximately 28.81% of the issued and outstanding Common Shares. In addition, Glencore holds an exchange warrant that, if exercised, would result in the issuance of an additional 78,823,098 Common Shares upon conversion of amounts outstanding under certain convertible debentures held by Glencore, resulting in Glencore holding 171,659,170 Common Shares representing approximately 42.80% of the outstanding Common Shares (assuming no other shares committed under existing compensation arrangements were issued by PolyMet).
Glencore also holds certain purchase warrants which will result in a total of 14,138,627 Common Shares being issuable to Glencore upon exercise. Assuming exercise of all exchange and purchase warrants, but excluding issuance of shares committed under existing compensation arrangements, Glencore would hold a total of 185,797,797 Common Shares representing approximately 44.75% of the Common Shares on a partially diluted basis (assuming no other shares committed under existing compensation arrangements were issued by PolyMet).
Following completion of the Rights Offering, Glencore will be deemed to beneficially own, or exercise control or direction over, the number of Common Shares as set out below.
The number of Common Shares to be owned by Glencore cannot be determined at this time as the offering amount and Rights Price will only be determined at the time of the filing of the Final Prospectus. Accordingly, the information in this news release (including with respect to the Standby Fee) assumes an offering amount of approximately US$265 million, is based upon the current market price for the Common Shares and is subject to change when the actual Rights Price of the Common Shares to be issued upon exercise of the Rights has been determined.
The assumed Rights Price of US$0.43 per Common Share is based upon a discount of 20% to US$0.53, being the US dollar equivalent (based on the closing rate of exchange published by the Bank of Canada on May 3, 2019 of C$1 = US$1.3429) of the five day volume weighted average price of Common Shares on the Toronto Stock Exchange calculated as of the date of execution of the Standby Purchase Agreement. The numbers below also assume that there is no change to Glencore’s holdings in PolyMet and the outstanding Common Shares of PolyMet prior to completion of the Rights Offering.
Full exercise of Rights by other Shareholders
Assuming (i) holders of rights (“Rights”) take up their basic subscription privilege in full; and (ii) no holder of securities having any other right to acquire Common Shares (including Glencore) exercises any such right, following closing of the Rights Offering, Glencore would acquire 177,556,657 additional Common Shares and as a result Glencore would beneficially own, or exercise control or direction over 270,392,729 Common Shares, representing approximately 28.81% of the 938,502,574 then issued and outstanding Common Shares.
Customary anti-dilution provisions of Glencore’s purchase warrants, which will be triggered by the Rights Offering, would adjust the number of Common Shares issuable to Glencore.
No exercise of Rights by other Shareholders
Assuming none of the holders of Rights, other than Glencore, exercise their basic subscription privilege and accordingly Glencore acquires all Common Shares offered under the Rights Offering, following closing of the Rights Offering Glencore would acquire 616,279,070 Common Shares and would be deemed to beneficially own, or exercise control or direction over, 709,115,142 Common Shares representing approximately 75.56% of the 938,502,574 then issued and outstanding Common Shares.
Customary anti-dilution provisions of Glencore’s purchase warrants, which will be triggered by the Rights Offering, would adjust the number of Common Shares issuable to Glencore.
Investment Intent
Glencore’s decision to enter into the transactions described above was made in the context of its overall investment purposes. Glencore will continue to review its investment alternatives from time to time and may determine to increase or decrease its equity ownership in PolyMet through the acquisition or sale of additional outstanding Common Shares or other securities of PolyMet through open market or privately negotiated transactions in accordance with applicable securities laws.
The head office of PolyMet is located at 100 King Street West, Suite 5700, Toronto, Ontario M5X 1C7.
The head office of Glencore is located at Baarermattstrasse 3, CH-6340 Baar, Switzerland.
This news release does not constitute an offer to sell, nor the solicitation of an offer to buy, the securities in any jurisdiction; nor shall there be any sale of securities mentioned in this news release in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
This news release is being issued pursuant to National Instrument 62-103, persons who wish to obtain a copy of the early warning report to be filed by Glencore in connection with this transaction may obtain a copy of such report from www.sedar.com or by contacting the persons named below.
For further information, please contact:
Investors
Martin Fewings
t: +41 41 709 2880
m: +41 79 737 5642
martin.fewings@glencore.com
Ash Lazenby
t: +41 41 709 2714
m: +41 79 543 3804
ash.lazenby@glencore.com
Media
Charles Watenphul
t: +41 41 709 24 62
m: +41 79 904 33 20
charles.watenphul@glencore.com
Notes for Editors
Glencore is one of the world’s largest global diversified natural resource companies and a major producer and marketer of more than 90 commodities. Glencore's operations comprise around 150 mining and metallurgical sites, oil production assets and agricultural facilities.
With a strong footprint in both established and emerging regions for natural resources, Glencore's industrial and marketing activities are supported by a global network of more than 90 offices located in over 50 countries.
Glencore's customers are industrial consumers, such as those in the automotive, steel, power generation, oil and food processing sectors. We also provide financing, logistics and other services to producers and consumers of commodities. Glencore's companies employ around 158,000 people, including contractors.
Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the International Council on Mining and Metals. We are an active participant in the Extractive Industries Transparency Initiative.