A tepid reception has prompted Freeport-McMoran Copper & Gold (FCX-N) to spruce up an offer for early redeemption of its 7.5% senior notes due in 2006.
The major is now offering US$1,030 per US$1,000 principal amount plus all accrued interest. That’s 2%, or US$20, more than what it had offered.
By April 2, noteholders had tendered US$42.3 million worth of notes, or roughly 21% of those outstanding. The expiry date has been extended to April 16.
All other terms and conditions remain unchanged.
Freeport-McMoran also is offering US$1,010 per US$1,000 principal amount for its 7.2% notes due in 2026. On April 2, a day before the offer was scheduled to expire, about US$73 million worth of notes had been tendered, leaving 71% outstanding.
Freeport-McMoran has about US$750 million in cash, more than enough to cover the US$459 million needed to redeem both types of notes.
The company pulls its metals from the massive Grasberg mine in Indonesia, where reserves stand at an astonishing 2.6 billion tonnes grading 1.12% copper, 1.02 grams gold and 3.73 grams silver per tonne. Freeport Indonesia’s share, in which the major owns a 91% stake, comes to roughly 39 billion lbs. copper, 49 million oz. gold and 111 million oz. silver.
In 2003, Freeport-McMoran expects to sell 1.4 billion lbs. copper and 2.6 million oz. gold.
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