August 07, 2018

Sale process update

The receivers and managers (‘the Receivers’) of Mirabela Nickel Ltd (In Liquidation) (Receivers and Managers Appointed) (‘MBN’) wish to provide the following overview and update of the sale process in relation to the assets of MBN.


Sale campaign

In late 2015, the Receivers commenced an extensive international sale process for the assets of MBN including MBN’s shareholding in Mirabela Mineração do Brasil Ltda (‘MMB’) and its related assets (‘the Assets’), The sale campaign did not result in any offers for the Assets that were capable of acceptance. Following this, the Receivers engaged in extensive negotiations with an ad hoc group of noteholders of MBN (the ‘Ad Hoc Group’) to reach an agreement for the sale or recapitalisation of the Assets. The Ad Hoc Group were ultimately unable to deliver a bid that was capable of implementation.
 
In early 2017, following a rebound in the global demand for Nickel assets, the Receivers commenced a second-round international sale campaign. This campaign included several parties who had previously expressed interest in the assets as well as several new parties identified as being capable of recapitalising MMB.
 
Interested parties were provided updated detailed marketing documentation as well as access to an extensive virtual data room. Interested parties were also provided the opportunity to access MMB management and conduct site visits in Brazil before submitting non-binding indicative offers.
 
After a comprehensive initial due diligence phase, seven indicative bids were submitted that ranged in terms of price and conditionality.
 
The final bid that was accepted and which has now completed had the highest cash consideration, lowest conditionality and was the only bid capable of completion. Following acceptance of the bid, an Asset Sale Agreement with the successful bidder was signed in late 2017. Due primarily to the need to engage with several key stakeholders in the USA, Australia and Brazil, completion of the sale occurred on 30 July 2018.
 
The buyers of the Assets are related parties to Appian Capital Advisory LLP, an investment advisor to the Appian Natural Resources Fund LP, a private fund that invests solely in mining or mining related companies (the ‘Buyer’). The Buyer is well positioned to recapitalise MMB given its proven track record in completing large scale mining acquisitions, its ability to work alongside existing management teams, and its capacity to operate across select geographies and commodities.
 
The sale price for the Assets is confidential. However, the price was less than the total amount outstanding to the secured creditors and accordingly the Receivers do not anticipate a return to unsecured creditors or shareholders.