- Noranda Income Fund (NIF.UN) has agreed to sell all its priority units to Glencore Canada Corporation for roughly $53.2 million in cash
- Noranda Income Fund is an income trust that owns an electrolytic zinc processing facility and ancillary assets in Salaberry-de-Valleyfield, Quebec
- The agreement included a termination amount of $2.1 million, payable to Glencore
- The fund’s priority unit holders will receive an immediate premium, and removal of future dilution, commodity, and execution risk
- Noranda Income Fund (NIF.UN) is up 41.84 per cent trading at $1.39 per share as of 12:55 p.m. EST
Noranda Income Fund (NIF.UN) has signed an agreement to sell all its priority units to Glencore Canada Corporation for roughly $53.2 million in cash.
Noranda Income Fund is an income trust that owns an electrolytic zinc processing facility and ancillary assets in Salaberry-de-Valleyfield, Quebec.
There are approximately 37.5 million priority units in the fund, and units will be sold for $1.42 apiece. The company stated the agreement was unanimously approved by the board of trustees of Noranda Operating Trust and is expected to close during the first quarter of 2023.
Glencore currently holds 100 per cent of Noranda’s fund’s special fund units, which represents 25 per cent of all issued and outstanding units of the fund. Because the transaction is all-cash, the deal requires no financing condition.
As a result, the fund’s priority unit holders will receive an immediate premium and removal of future dilution, commodity, and execution risk.
According to Noranda Income Fund, it has not been able to generate cash for monthly distributions for unit holders since 2017. With long-term capital expenditures needed for certain operations, it does not expect it would be able to do so anytime soon.
The agreement was unanimously approved by Noranda’s board of trustees but is still subject to regulatory unit holder and court approvals.
Noranda Income Fund (NIF.UN) is up 41.84 per cent, trading at $1.39 per share as of 12:55 p.m. EST.
