Has billionaire Murray Edwards stepped in to prop up a troubled Canadian copper miner once more? That’s what investors and analysts are wondering after Imperial Metals Corp. won a second reprieve on its loans until Oct. 13 while bankers review a new financial rescue plan.
Edwards, the company’s largest shareholder who has been involved since 1994, has previously helped bail out Imperial Metals by injecting capital, making a loan and guaranteeing a credit line.
Imperial’s shares and bonds have slumped amid uncertainty as to whether Edwards, and money manager Bruce Berkowitz’s Fairholme Capital Management, the largest bondholder, would step in with additional financing. The Vancouver-based company fed those concerns last month when it disclosed lenders had to grant a waiver to avert default, and warned there’s doubt Imperial can survive without more financing or a debt extension.
“We’re encouraged that things are going to go successfully; we’ve been working productively with the banks,” Steve Robertson, vice president corporate affairs at Imperial Metals, said by phone. “We fully expect that we’ll have a final plan that’s approved by that time.”
The financing plan will help the company stave off a full-blown restructuring, which looks likely without the additional support, according to ratings firms. “When you get to that point when you see no option at all, that’s probably when they would file to restructure,” said Jamie Koutsoukis, an analyst at Moody’s Investors Service.
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