France is set to become Eramet‘s (EPA:ERMT) largest shareholder by increasing its stake during a €500 million ($801.8 million) capital increase later this year, the French mining group said on Monday.
Nickel, manganese, and lithium producer Eramet had announced in February it would conduct a capital hike to help recover from a slump in earnings and a jump in debt.
The French state will raise its stake to up to 49%, from 27% currently, by acquiring some of the holding of the Duval family, at the moment Eramet’s biggest shareholder with a 37% stake, Eramet said in a statement.
The Duvals will become Eramet’s second-largest shareholder and renew a pact with the French state, Eramet said.
The group chose the French state’s proposal as “the best solution” to secure Eramet’s financial position and reinforce supply of strategic metals to France and Europe, Chair and CEO Christel Bories told reporters on a call.
“The idea is not at all to nationalise Eramet,” she said, noting that France would remain below 50% in capital and voting rights.
The amount invested by the French state will depend on market conditions and terms with the Duvals, she said.
Eramet plans to carry out the capital hike somewhere between its third-quarter sales publication on 29 October and the end of the year.
Eramet also aims to sell stakes in some assets but Bories declined to detail any potential deals.
Eramet has also been in a management crisis, with the firing of former CEO Paulo Castellari and the departure of ex-finance chief Abel Martins-Alexandre this year.
Bories, who resumed the CEO role on an interim basis, said the clarification of the shareholding structure would facilitate the recruitment of the next chief executive.
($1 = 0.8953 euros)
(Reporting by Gus Trompiz and Elizabeth Pineau; Editing by Tomasz Janowski)
Main image: Eramet
