April 8 (Reuters) - Eramet's largest shareholder, the Duval family, has hired bankers as it considers the sale of its stake in the troubled French mining group, the Financial Times reported on
Eramet reaffirms shareholder support for capital hike as Duvals hire adviser
Main Shareholders Back Capital Increase Amid Duval Family Moves
By Gus Trompiz and Akanksha Khushi
Shareholder Support for Eramet’s Funding Plan
April 8 (Reuters) - Eramet's main shareholders including the Duval family have reaffirmed support for a capital increase by the mining group, a spokesperson said on Wednesday, playing down news that the Duvals had hired a bank to advise them on their options.
The struggling French firm said in February that it was planning a capital increase of 500 million euros ($583.80 million) as well as asset sales to shore up cash, after a slump in earnings and a jump in debt last year.
Official Statement from Eramet
"Eramet’s main shareholders have reaffirmed their support for the Group’s strategy and the funding plan announced on February 18," the spokesperson said in an emailed statement, adding: "Management and shareholders remain fully committed to the success of this capital increase."
Duval Family’s Strategic Review
The statement by the nickel, manganese and lithium producer followed a Financial Times report in which the newspaper, citing people familiar with the matter, said that the Duval family, Eramet's largest shareholder, has hired bankers as it considers the sale of its stake.
Appointment of Lazard as Adviser
The family has appointed Lazard to explore options for its 37% holding and to advise them ahead of the company's capital raise, the report added.
The spokesperson confirmed that the Duvals had appointed an adviser but said it was "standard practice" in the context of a capital increase.
Stakeholder Responses
A representative for the Duval family declined to comment. France's state shareholding agency, which is Eramet's second-largest shareholder with a 27% stake, also declined to comment.
Market Reaction and Upcoming Announcements
Eramet shares were up 3.6% by 1406 GMT, having climbed by more than 7% earlier in the session.
The terms of the capital increase are due to be announced ahead of the miner's annual shareholder meeting next month.
Challenges Facing Eramet
Operational and Market Pressures
Eramet suffered last year from lower manganese prices, a weaker dollar and production setbacks. It is facing further pressure this year from a sharp cut to its permitted nickel mining volumes in Indonesia and a halt to its mineral sands output in Senegal following a fire.
Management Crisis
Eramet has also been embroiled in a management crisis following the firing of former CEO Paulo Castellari and the suspension of finance chief Abel Martins-Alexandre within days of each other in February.
($1 = 0.8565 euros)
(Reporting by Akanksha Khushi in Bengaluru and Gus Trompiz in Paris; additional reporting by Augustin Turpin in Gdansk; Editing by Sonia Cheema, Kirsten Donovan and Bernadette Baum)
