Mario Arregu�n told journalists on a call that the company is considering whether its largest shareholder, Mexico’s Industrias Penoles (PE&OLES.MX), which owns a 77.14% stake, would be willing to sell a stake in order to increase Fresnillo’s free float to 25% from 22.86% at the moment.
Mr. Arregu�n said Penoles is “not keen” to sell a stake due in part to the big tax impact it would incur.
A second option would be to do a rights issue in order to meet the free-float requirement. If the company decides to do a rights issue, it would have to issue the shares before the end of the year, said the company’s Chief Executive Octavio Alv�drez.
At the current share price, the company would end up raising 229 million pounds ($341.7 million) if it were to issue shares now.
Mr. Arregu�n said the proceeds could be used to fund its growth projects and could be used for mergers and acquisitions, although he noted the company would maintain a disciplined approach to capital allocation. He also said that no decision has been taken yet on how to comply with the FTSE requirement.
Fresnillo is majority-owned by Mexico’s Industrias Penoles (PE&OLES.MX), which spun off its precious metals holdings in a May 2008 initial public offering.
Write to Alex MacDonald at [email protected]
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