The state-backed Industrial Revitalization Corp. of Japan said Wednesday it has named a Japanese consortium led by Nippon Steel Corp. to sponsor the reconstruction of ailing Mitsui Mining Co.
The consortium, which includes trading house Sumitomo Corp. and Daiwa Securities SMBC Principal Investment Co. -- an investment arm of Daiwa Securities Group Inc. -- has been competing for the sponsorship with U.S. investment fund WL Ross & Co.
IRCJ, which has acquired a stake of about 52 percent in Mitsui Mining since its decision in October 2003 to support the firm's reconstruction, said it will sell a 33 percent stake and all of its preferred shares to the consortium on March 30.
Of the 33 percent interest, a 16.98 percent portion will go to Daiwa Securities SMBC Principal, making the company the second-largest shareholder in Mitsui Mining, while Nippon Steel and Sumitomo will equally purchase a 7.99 percent stake, becoming the third-largest. IRCJ will remain the largest shareholder, with a stake of 19.37 percent.
"The best sponsors have been selected to improve our company's corporate value," Mitsui Mining President Taro Yamaho told a news conference after IRCJ's decision.
"We hope that the new sponsors will support the company's renewal and further development," Yamaho said.
Mitsui Mining has recently seen robust sales of coking coal, its mainstay product. It has signed a contract to provide 500,000 tons of the coal annually to Nippon Steel over 10 years, using an idle plant that will resume operations next year.