Paladin Energy has suspended trading in its shares as it seeks a way around the latest disaster to beset its attempts to stay afloat.
Paladin told the market on Thursday its Chinese partner in the Langer Heinrich uranium mine, CNNC Overseas Uranium Holdings, had asked the company to provide “fair market valuation” of its remaining 75 per cent of the Namibian operation.
The request for a valuation is the first step in a process that may lead to CNNC exercising an option to acquire the producing uranium mine at a knock-down price if Paladin fails to meet solvency hurdles. However, the ASX-listed Paladin has indicated it has doubts about the validity of the option.
CNNC bought 25 per cent of the mine for $US190 million in 2014, in what was then a company-saving cash injection. The option is the legacy of that arrangement.
Paladin had hoped CNNC would pay $US175 million for a further 24 per cent of Langer Heinrich to help ease concerns it would fail to meet an April deadline to repay $US212 million of convertible notes.
But it gave up on that hope early this year, instead opting to try to negotiate an ambitious debt-for-equity swap with bondholders owed more than $US370 million. A key condition of the negotiations was that Paladin retained its 75 per cent stake in Langer Heinrich.
Paladin had previously said the deal may fail if CNNC exercised its option with 60 days of the launch of the refinancing plan — by March 11 — and admitted yesterday the Chinese move could wreck its chances of closing the deal.
It said CNNC’s move “creates uncertainty” over the restructuring proposal.
In seeking suspension of its shares, it said “continued trading in Paladin’s securities is likely to be materially prejudicial to Paladin’s continued financial viability”.
Paladin said it did not expect to resolve the situation until at least the end of this month.
Its shares last traded for 10.5¢.