European miner Xstrata plc will be raising (US)$5.9 billion from shareholders to cut their debt loans as mineral commodity prices continue to tank and financial markets stay frozen.
The company will issue 1.96 billion in new shares at US $3 per share to repay the debt as profits have fallen 35 per cent from 2007. Xstrata's main shareholder, Glencore International AG, supports the rights issue.
"Xstrata's absolute level of debt is now perceived as a potential constraint," said chief executive Mick Davis in a Jan. 29 statement," given the uncertainty that exists over the near-term outlook for commodities."
Xstrata operates nickel and base metal mining assets in Sudbury and its new Nickel Rim Mine scheduled to start production this year.
.jpeg;w=120;h=80;mode=crop)
