(Alliance News) - Bushveld Minerals Ltd has reduced the price of an acquisition, it said on Wednesday, due to current market conditions.
In May, Bushveld announced the acquisition of the Vanchem plant and Ivanti Resources Pty Ltd from Vanchem Vanadium Products Pty Ltd, which is part of Duferco Vanadium Investment Holding SA.
It also bought other assets from South African Japan Vanadium Pty Ltd, a subsidiary of Vanchem Vanadium Products.
Bushveld's original payment was USD68 million, but this has been reduced to USD53.5 million, of which USD30 million will be in cash and the rest in convertible loan notes.
"The improved terms take into account current market conditions while affirming the medium to long term vanadium market outlook of the company, which is the natural buyer of Vanchem," said Bushveld.
Bushveld's Chief Executive Fortune Mojapelo said: "Bushveld's ambition to become a leading low-cost producer takes a big step forward with the acquisition of Vanchem. With this acquisition, the company will have two quality primary processing assets producing a complementary suite of products, with a four kiln configuration, that gives it unmatched production flexibility.
"The Vanchem acquisition completes at a time when vanadium prices have seen a market-dip necessitating the revised transaction terms."
"The company's view on the vanadium outlook however remains positive and supportive of the company's production growth aspirations. We look forward to completing this transaction and unlocking its value as Bushveld continues on its journey into a significant low cost, vertically integrated primary vanadium company," he continued.
Johannesburg-based Bushveld shares were 1.8% lower on Wednesday morning in London at a price of 27.01 pence each.
By George Collard; georgecollard@alliancenews.com
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Bushveld Minerals (BMN)