Chadbourne Represented Kinross Gold in $3.1 Billion Acquisition of Bema Gold
February 28, 2007
Chadbourne & Parke LLP represented Kinross Gold Corp. in the $3.1 billion acquisition of Bema Gold Corp. in a deal that creates a $7.9 billion gold producer.
The deal was signed in December and closed on February 27, 2007.
Ninety-one percent of Bema shareholders voted in favor of the acquisition at a January 30 shareholders' meeting. The deal increases Kinross' gold reserve and resource base to more than 50 million ounces and gives the company a well-balanced gold reserve profile with 39% in Chile, 37% in Brazil, 16% in North America and 8% in Russia.
Working for Chadbourne on the deal were Laura M. Brank, Moscow office Managing Partner and Head of the CIS Practice; Konstantin Konstantinov, partner, Moscow office; Svetlana Sineva, senior associate, Moscow office; Jennifer Handz, multinational partner, London; and Kyle Davis, associate, Moscow. Also working on the deal were Charez Golvala, MNP partner in London, and Christopher Man, associate in the Washington, DC, office.
Chadbourne assisted Kinross on Russian and certain U.S. and English law aspects of the deal, including due diligence and mining law issues and the restructuring and spin-off of certain Russian assets and agreements related to management and operation of the spun-off Russian assets.
The Firm also assisted in obtaining Russian antimonopoly approvals for the transaction itself, i.e., the amalgamation of Kinross and Bema, since it affected four Russian companies, including Bema's shares in Chukotka Mining and Geological Company (CMGC), a major gold producer in the Chukotka Peninsula in the far east of Russia. In addition, Chadbourne has been advising on a separate joint venture being set up by Kinross, a new company formed by Bema management and a Russian shareholder.
Chadbourne also advised on consent waivers and amendments to a CMGC project finance facility with a syndicate of lenders, subordinated lenders and hedging counterparties. The facility is around $400 million — a CMGC senior loan of $400 million and a junior loan of $25 million.
The acquisition was completed by way of a shareholder-approved plan of arrangement whereby each Bema common share will be exchanged for 0.441 of a Kinross common share, representing a 34% premium to the 20-day volume weighted average price of Bema common shares on the Toronto Stock Exchange. Upon completion of this transaction, 61% of Kinross will be held by existing Kinross shareholders and 39% by existing Bema shareholders.
Chadbourne has a longstanding relationship with Kinross. The Firm has regularly advised Kinross Gold and its Russian subsidiary Omolon Gold Mining Company since 1998, on its Russian operations.
In 2002, Chadbourne acted as U.S. counsel to Kinross in connection with U.S. SEC approval related to its combination with two other gold companies and its migration to the New York Stock Exchange. For full details of the transaction see: http://www.lexpert.ca/deal.php?id=426.