China Investment Corporation
July 03, 2009 07:28 ET
China Investment Corporation Announces Investment in Teck Resources Limited
BEIJING, CHINA--(Marketwire - July 3, 2009) - China Investment Corporation ("CIC") announced today that it has agreed to purchase on a private placement basis, through its wholly-owned subsidiary (SPV) Fullbloom Investment Corporation, 101,304,474 Class B subordinate voting shares(1) ("Class B Shares") of Teck Resources Limited ("Teck") for C$17.21 per share (the "Subscription Price"). The aggregate purchase price will be US$ 1.5bn (or approximately C$ 1.74bn) in cash. CIC does not currently hold any of Teck's shares.
After completion of the purchase, CIC will indirectly hold Class B Shares representing approximately 17.5% of Teck's issued and outstanding Class B Shares, approximately 17.2% of Teck's issued and outstanding shares and approximately 6.7% of the aggregate voting rights attaching to Teck's Class A common shares and Class B Shares. The transaction is expected to close on or about July 14, 2009 and is subject to customary conditions, including applicable stock exchange approvals.
CIC is acquiring the Class B Shares for investment purposes as a long-term passive financial investor and has agreed to hold the purchased shares for at least one year following closing. CIC is subject to certain contractual restrictions on the acquisition of additional Teck shares. Subject to certain limitations agreed with Teck, including the one year hold period, CIC may dispose of all or any portion of its Class B Shares or enter into other transactions with respect to such shares.
CIC will have the right to maintain its percentage ownership interest through participation in additional issuances of Teck shares or securities convertible into Teck shares. CIC will also be entitled to certain price protection, if Teck issues additional Class B Shares or other securities convertible into or exchangeable for Class B Shares within one year of closing at a price less than the Subscription Price.
Scotia Capital Inc. acted as financial advisor and Torys LLP acted as legal advisor to CIC in this transaction.
China Investment Corporation
New Poly Plaza
No. 1 Chaoyangmen Beidajie
(1) Teck's issued and outstanding shares include Class A common shares and Class B subordinate voting shares. Class A common shares carry the right to 100 votes per share. Class B subordinate voting shares carry the right to one vote per share. In all other respects, the Class A common shares and Class B subordinate voting shares rank equally. The attributes of the Class B subordinate voting shares contain so called "coattail provisions," which provide that, in the event that an offer to purchase Class A common shares, which is required to be made to all or substantially all holders thereof, is not made concurrently with an offer to purchase Class B subordinate voting shares on identical terms, then each Class B subordinate voting share will be convertible into one Class A common share.