Brookfield Asset Management Inc. is laying the groundwork for the possible sale of one of the world’s only dedicated palladium companies even as prices for the metal used in car pollution control devices soar.
Canada’s largest alternative asset manager is the majority owner of North American Palladium Ltd., whose main asset is a mine near Thunder Bay, Ontario with reserves of 21 million metric tons. Brookfield’s involvement began in 2013 when the company almost collapsed amid a poorly conceived expansion.
What began as a $130 million loan became a 92 percent equity stake after the company’s situation deteriorated further and it failed to find a buyer. Since then, North American Palladium has redesigned the asset and managed to post its first quarterly profit in six years as prices of the precious metal rallied.
Asked if Brookfield intends to hold the asset to reap rewards over the long term, Brookfield Managing Partner Peter Gordon, who is chairman of the board at Northern American Palladium, suggested the firm would look to exit once its strategy is achieved.
“We’re disciplined investors,” he said in an interview this week. “When the turnaround is complete and we feel the company’s value is fairly reflected in the share price, we’ll consider our opportunities and alternatives.”
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