Glencore's Katanga Mining Assessing Ways to Recapitalize Congo Subsidiary

By Oliver Griffin

Glencore said Sunday that its majority-owned subsidiary, Katanga Mining, is assessing recapitalization options to resolve a dispute between its copper project in Congo and the African nation's state-owned mining company.

The Anglo-Swiss commodities trader and miner said that Katanga is looking to recapitalize its 75%-owned Kamoto Copper Company--its operating subsidiary in Congo--after its state-run joint venture partner Gecamines launched legal proceedings to dissolve Kamoto Copper over its capital deficiency.

Glencore said that Katanga could convert of a portion of existing intercompany debt, which it is owed by Kamoto Copper, into equity, or forgive a portion of such debt.

Either solution will affect the distribution of future cash flows earned by Kamoto Copper, which might in turn have a materially adverse impact on Katanga, Glencore said.

Negative effects wouldn't be expected to have a material impact on the assets, liabilities and net assets of Katanga, Glencore said.

Write to Oliver Griffin at [email protected]

Corrections & Amplifications

This article was corrected at 0912 GMT because the original incorrectly said Katanga Mining is assessing options to raise capital in the headline, and in the first and second paragraphs. The company is assessing options to recapitalize Kamoto Copper, not to raise new funds.