BC Iron

US$130m Acquisition Debt, A$47m Underwritten Share Placement and A$10m SPP

December 2012

On 10 December 2012, ASX-listed iron ore producer BC Iron announced a landmark transaction with Fortescue, whereby BC Iron paid Fortescue A$190m to:

• Acquire a further 25% interest in the Nullagine Iron Ore Joint Venture(“NJV”);
• Increase the capacity available to the NJV on Fortescue’s rail and port infrastructure from 5 mtpa to 6 mtpa;
• Prepay 3.5 mt of its share of rail haulage and port charges to Fortescue.

The transaction resulted in BC Iron increasing its interest in the NJV from 50% to 75% and increasing its equity share of production from 2.5 mtpa to 4.5 mtpa.

BC Iron funded the acquisition via a combination of debt, equity and existing cash. Specifically, BC Iron entered into a 5 year, US$130m amortising term loan facility with ANZ and Commonwealth Bank at an attractive margin of USD LIBOR. The equity raising comprised a A$47m underwritten institutional placement at an issue price of A$3.04 per share, a 4% premium to the previous closing price. BC Iron also raised a further A$10m via an oversubscribed share purchase, Azure acted as independent financial adviser to BC Iron on all aspects of the transaction, including managing the debt and equity financings.