Kagara Says Received Approaches for Sale of IPO Gold Assets

By Jesse Riseborough

April 17 (Bloomberg) -- Kagara Ltd., an Australian zinc and copper producer, has received approaches for its gold assets that are being readied for a A$150 million ($108 million) initial share sale in July to help reduce debt.

“We are not just confining ourselves to the IPO route,” Joe Treacy, a director with Perth-based Kagara, said today in an interview. “We’ve also had quite a lot of expressions of interests from other companies who are in the gold space looking for gold assets.”

Kagara is divesting the gold assets to help repay A$150 million of debt and is in refinancing talks with lenders, Treacy said. Rio Tinto Group and Alcoa Inc. are among global mining companies selling shares, bonds or assets to trim debt and boost cash as the global recession crimps demand, cuts metals prices and slashes earnings.

“We will be guided at the end of the day by what the market can bear,” Treacy said. “At the end of the day, we will weigh up all those options.”

Kagara jumped to a six-month high in Sydney trading, gaining 14 percent to 98 cents at 3:16 p.m. Sydney time on the Australian stock exchange. The stock has more than doubled this month and has a market value of A$250 million.

“We are not seeing anything unusual” on the share register, Treacy said. This month’s rebound in copper and zinc prices has also boosted the stock, he said.

To contact the reporter on this story: Jesse Riseborough in Melbourne at jriseborough@bloomberg.net