Korea Zinc pulls $1.8 billion share sale plan after probe
The world’s largest zinc smelter has been caught up for months in a fight between its largest shareholders over strategy and direction.
Myanmar Metals said on Wednesday it planned to sell its 51% stake in Bawdwin silver, lead, and zinc project in Myanmar, citing difficulties in securing financing for the $300 million project after a coup led to social unrest earlier this year.
Businesses have collapsed in the Southeast Asian country ever since the military coup, which prompted widespread protests and strikes. The violence displaced thousands and killed hundreds of civilians.
“It is the board’s view that the procurement of project finance in the near term by the company would be extremely problematic and realistically unlikely,” Australian-based Myanmar Metals said.
Ever since the coup this February, all parties that had shown interest in financing the project in the Shan State of Myanmar have withdrawn, the company said, adding that it will lose almost all of its A$11.4 million of cash reserves in less than a year if it were to stay involved with the Bawdwin project.
The best path forward, Myanmar Metals said, will be to sell its stake in the project or the company as a whole. It has already started to look at international and local players.
Foreign companies are scaling back or even pulling down operations while those with ties to army-linked firms are being urged to cut them.
Earlier this month, Norwegian telecoms firm Telenor sold its Myanmar business, blaming the difficulties of operating under the military junta and dealing a blow to activists who say they relied on the only Western operator for communications.
China-based Yintai Gold Co proposed a A$66.5 million takeover of Myanmar Metals last month. The Australian metals explorer said on Wednesday it was working towards facilitating access to due diligence.
($1 = 1.3628 Australian dollars)
(By Nikhil Kurian Nainan; Editing by Sherry Jacob-Phillips)
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