Multinational miner Glencore has become a substantial shareholder in troubled junior Australian resources company Atlas Iron.
Glencore told the ASX it has purchased 8.47% of the iron ore miner. The stake would have cost about $15.8 million at $0.021 per share, the latest price.
Switzerland-based Glencore, the world’s largest exporter of thermal coal, has 20 operational coal mines in Australia. It also has interests in copper, cotton, grain and oilseeds, nickel and zinc.
Atlas Iron last month got shareholder approval to swap debt for equity with its lenders. The deal cuts what Atlas owes to lenders to $US135 million ($A176 million) from $US267 million ($A348 million) and extends the maturity date to April 2021 from December 2017.
The cash interest Atlas pays on the debt falls by about 65%, a saving of $20 million a year.
The Pilbara miner will issue new shares and options, giving the lenders a combined stake of about 70% in the company.
Atlas started mothballing its mines in April last year because the cost of digging the ore was greater than the price on the global market.
It then restarted after doing deals with contractors and cutting costs hard.
For the six months to December, iron ore production was steady at 6.9 million tonnes but revenue fell 17.4% to $372 million.