Mineral company Kenmare Resources has confirmed a large-scale financial restructuring plan that could involve raising hundreds of millions of dollars at the troubled explorer.

The company defaulted on its debts earlier this year after failing to reach an agreement with its lenders on a deleveraging plan.

Kenmare, which focuses on iron and titanium ore ilmenite, said on Thursday it was ready to raise $100 million by selling stock to a company based in the British Virgin Islands.

King Ally Holdings, a chemicals trading company incorporated in the British Virgin Islands, will invest $100 million on the basis that it will hold not more than 29.9 per cent of the enlarged issued share capital of the company following the completion of the capital restructuring.

Oman

Kenmare is looking to source the same amount from Oman’s sovereign wealth fund and generate a further $100 million through a placing aimed at existing shareholders.

Discussions with Kenmare’s lenders in relation to a deleveraging plan are continuing, and the lenders continue to work with the company towards its implementation.

As currently envisaged, it entails a capital restructuring by an equity fundraising of not less than $275 million, of which a significant portion would be used to reduce debt, while the balance would be available to the company for working capital purposes.