Brookfield Business Partners to Sell Big Stake in North American Palladium
Impala Platinum moves to control only pure-play palladium firm
Brookfield Business Partners announced a plan to sell its 81% interest in North American Palladium.
The real state giant is selling the Canadian mining company and only global pure-play palladium producer to Impala Platinum Holdings (Implats).
The deal will see Implats buy all outstanding NAP stock from Brookfield for roughly $750 million.
Implats is also buying the other 19% of NAP stock not held by Brookfield.
Details of the Brookfield Business Partners Deal
Since Brookfield Business Partners recapitalized NAP and acquired control of the company in 2015, NAP has completed a successful operational turnaround.
These efforts resulted in consistently strong earnings, significantly increased palladium production and mine life, growth of reserves through exploration activities, and reduced costs.
According to a press release on the deal, palladium demand has remained robust. Demand is supported by the auto industry for use in catalytic converters that help cut greenhouse emissions. Terms of the deal state that Brookfield Business Partners will generate for its 20% ownership interest in NAP about $130 million, after taxes.
Finally, Brookfield originally made a $130 million loan to North American Palladium. This loan would convert to a 92% equity stake when the business struggled. Furthermore, the company sold 10% of its stake to the public in 2o15. That deal produced proceeds of about $75 million.
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