Breakingviews-Qatar steals $1 bln march on European Goldfields

Mon Oct 3, 2011 10:24am BST

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By Una Galani

DUBAI Oct 3 (Reuters Breakingviews) - The Gulf country is hungry for exposure to gold. Its offer to finance a Greek mining project will secure it at least 27 pct of the Canadian group at a snip of its mooted July valuation. But in current markets, investors will have to think hard before turning away the Qataris.

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CONTEXT NEWS

-- Qatar Holding said on Oct. 1 that it will invest almost $1 billion in European Goldfields including $600 million to finance mining operations in Greece, where the Canadian listed firm recently won a key permit.

-- The sovereign fund agreed to provide a $600 million seven-year secured loan facility at a margin of 7 percent above 6 month Libor per annum. As part of the facility, Qatar will receive warrants to purchase 40.4 million shares in European Goldfields at a strike price of 9.08 Canadian dollars per share.

-- In addition, Qatar also acquired a total 9.9 percent stake in European Goldfields, or 18.2 million shares at a cost of 10 Canadian dollars each, from a subsidiary of Greek’s largest construction group Ellaktor and shareholder Dimitrios Koutras. As part of the deal, Qatar will have a call option to buy a further 5 percent or 9.4 million shares at a price of 13 Canadian dollars per share.

-- In August, Qatar agreed to invest 500 million euros to support a merger of Alpha Bank and Eurobank, two of the recession-hit country’s largest banks. The deal would give the Qataris about 17 percent of enlarged group.

-- Qatar Holding was advised by Credit Suisse. Evolution Securities, Liberum Capital, and Lazard & Co. advised the company and its directors.

-- The financing transaction is subject to shareholder approval.

-- European Goldfields statement here

-- Reuters: Qatar Holding to invest $1 bln in European Goldfields [nL5E7L10F2]

(The author is a Reuters Breakingviews columnist. The opinions expressed are her own)

-- For previous columns by the author, Reuters customers can click on [GALANI/]

(Editing by Pierre Briançon and David Evans)

((una.galani@thomsonreuters.com)) Keywords: BREAKINGVIEWS QATAR/

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