By Alex MacDonald
LONDON--Mexican precious metals producer Fresnillo PLC (FRES.LN)
is considering two options in order to meet the FTSE 100 index
free-float requirement of 25% of a company's share capital by the
end of 2013, the company's chief financial officer said
Tuesday.
Mario Arreguín 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. Arreguín 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 Alvídrez.
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. Arreguín 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 alex.macdonald@dowjones.com
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