One-time battery minerals darling, Jervois Global (ASX: JRV) has suspended trading on the ASX after revelations it will be taken private by U.S. lender Millstreet Capital.
Previously valued at over $1 billion, the stock ended trading with a market cap of $29 million, after the share price tumbled from $0.91 mid-April 20222 to $0.011 due to a major collapse in cobalt prices.
The ASX is expected to grant Jervois a waiver from any requirement for shareholder approval under the current listing rules. Following pending approval to delist, there is expected to be "no return for the current equity holders of the company".
Despite significant diligence and negotiations with third parties, the deal reached with Millstreet is understood to be the best option available.
In addition to the US$150 million Millstreet has already invested in the cobalt and nickel miner, the alternative investment firm as part of a US Chapter 11 bankruptcy deal, will recapitalise Jervois with US$145 million in new equity capital.
Around half these funds (US$70 million) are expected to help restart the miner’s Sao Miguel Paulista nickel cobalt refinery in Brazil.
Prior to the fall of the cobalt price two years ago, Jervois was embroiled in tax-payer funded bidding war between the US and the Finnish government, with the latter offering [Jervois] €12 million to return to its original growth strategy to double the size of its refinery near the Nordic country’s port of Kokkola.
The demise of Jervois is a major blow for AusSuper which over five years saw the industry superannuation fund invest around $100 million in the stock.
It’s understood the reorganised parent [of Jervois] intends to operate all of its subsidiaries with no interruption to business, continuing to service its customers.