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Friday, July 3, 2009 12:02:42 PM
Chinese investment fund takes $1.74 billion stake in Teck Resources
A sovereign wealth fund of the People's Republic of China has invested $1.74 million into Vancouver's Teck Resources Ltd. (TSX.TCK.B).
As part of the deal, a subsidiary of China Investment Corp. (CIC), which manages part of China's foreign exchange reserves, is acquiring 101.3 million Class B Teck shares for $17.21 per share.
Proceeds of the deal with Fullbloom Investment Corp. will be used to reduce Teck's outstanding bank debt accumulated from its $14.1 billion acquisition of Fording Canadian Coal Trust last year.
Don Lindsay, Teck's president and CEO said, "This transaction will have an immediate and very positive effect on Teck's balance sheet and represents an attractive opportunity for Teck to establish a relationship with a major Chinese investor."
As a result of the deal, CIC will own 17.2% of Teck's equity and 6.7% of the company's voting rights. Teck's Class A shareholders, however, will hold a 61.8% voting stake in Teck. Temagami Mining Company Ltd. holds a 28.5% voting interest.
CIC said it's acquiring Teck's Class B shares for investment purposes as a long-term and passive financial investor and has agreed to hold the shares for at least a year following completion of the deal, which is expected in mid-July.
CIC has also agreed that after the one-year hold period, it will not sell the shares to another mining company or to a material customer of Teck.
Teck's share price range during the past week: between $18.47 and $19.13; 52-week high: $49.24; 52-week low: $3.35.
Equifax report Vancouver credit payment delinquency rising fastest in Western Canada
Credit card payment delinquencies rose the fastest in Western Canada in the past year, according to data released Friday by Equifax Canada.
On a yearly basis, the average delinquency rates rose 27% in B.C. and 26% in Alberta, well above the national average of 18.8%.
Across Canada, the delinquency rate rose to 1.52%, meaning more than 500,000 Canadians are now more than 90 days behind on their credit card payments.
Equifax reported that the increase in overdue payments has risen substantially in the past three months. In the past year, delinquent payments for credit cards and sales financing rose 38% and 58%, respectively.
"Such transactions typically represent the purchase of durable goods such as furniture and electronics," said Nadim Abdo, Equifax Canada's vice-president of consulting solutions. "Consumers appear to be willing to fall behind on them first before they miss payments on their bank loans and lines of credit."
Despite the increase in delinquencies, Vancouver's rate was among the lowest in Canada at 1.18%, second only to Quebec City at 0.83%. Toronto had the highest delinquency rate at 1.98%.
Provincially, despite the increase in the number of people falling behind on their payments, Western Canada still has the lowest delinquency rates, with B.C. at 1.31% and Alberta at 1.42%.
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