HOPU, a private equity group based in China, has paid $61 million for a 15% stake in the Australian uranium miner Paladin Energy.
The Foreign Investment Review Board has approved the deal, allowing HOPU to take up to 19.99% in the uranium miner.
Paladin is also raising $144 million in a rights issue.
The combined raising plus Chinese investment funds will be used to pay down Paladin’s convertible bonds.
John Borshoff, Paladin’s CEO, says HOPU’s investment increases Paladin’s funding options.
“HOPU’s investment demonstrates its confidence in the uranium industry and its understanding of Paladin’s unique positioning in the uranium sector,” he says.
Borshoff says the uranium market is clearly recovering from its post Fukushima malaise.
He says Paladin is well situated to benefit from any upturn.
The uranium spot price has recovered from a low of US $28 per pound to a recent high of $44 per pound.
Paladin believes uranium is set for a long period of price strength with China confirming its strong commitment to its reactor fleet over the next 30 years.
Paladin has been in a trading halt but the shares last traded at $0.38. HOPU paid $0.42 a share.
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