Berkeley Energia (ASX:BKY, LON:BKY) has entered into an agreement with an Oman-based sovereign wealth fund which will invest up to $120M in the company’s Salamanca uranium mine. The total investment will consist of two different parts. A first tranche of $65M will be invested as an interest-free and unsecured convertible loan which could be converted by the sovereign wealth fund at a conversion price of 50 pence per share. Should this occur, the Omani fund will own a stake of just over 25% in Berkeley.
The Omani fund can then acquire an additional 9% of the company by exercising options at 85 pence per share as the project develops and advances. This would bring in an additional US$55M and would take care of Berkeley’s need to issue equity to build the Salamanca mine.
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The author has a long position in Berkeley Energia. Please read the disclaimer
