Business

Published: Saturday July 4, 2009 MYT 11:59:00 AM

China Investment buying 17% US$1.5bil in Teck Resources


VANCOUVER Mining company Teck Resources Ltd. said Friday it is selling a 17 percent stake to China Investment Corp. for 1.74 billion Canadian dollars ($1.5 billion) in a bid to reduce its debt load.

The Vancouver-based company said CIC, the world's largest commodity buyer, will buy 101.3 million class B voting shares for 17.21 Canadian dollars each.

CIC will hold onto the stock for at least a year, said the mining company.

The proceeds from the private placement will go toward paying down nearly $10 billion in bank debt and will also give the company a chance to forge a partnership with a major foreign investor, said Teck's chief executive in a conference call.

"We will have a financial relationship with a very deep-pocketed investor who would potentially participate in future development projects," said Don Lindsay.

The sale, which is still subject to regulatory approval, is slated to close on July 14.

Teck has been selling assets and cutting costs to pay down the debt acquired after the $9.8-billion purchase of Fording Canadian Coal Trust last year.

China, on the other hand, has been aggressively pursuing major acquisitions or investments in commodity companies.

In the oil industry, the Chinese have become the most aggressive deal makers, taking advantage of low oil prices to help feed the country's energy needs.

Last week, China's Sinopec announced it will acquire oil explorer Addax Petroleum for $7.2 billion, in what would be the largest overseas takeover ever by a Chinese company.

Sinopec, a refiner, would gain access to substantial reserves in West Africa and the Middle East if the takeover of Addax is approved. - AP


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