X2 Resources raises $US5.6 billion

Former Xstrata boss Mick Davis has raised $US5.6 billion from investors in a bid to buy mining assets and launch X2 Resources as a mid-level diversified resource company.

The company, based in London, said it had secured the money from a small number of investors including major sovereign wealth and pension funds.

The $US5.6 billion comprises a total of $US4 billion in committed equity capital, which is available for immediate draw down, and $US1.6 billion in conditional equity capital.

With commodity prices flat lining in recent months, there are a number of assets on the market and speculation is mounting that X2 could strike a sale deal in the very near future.

The Wall Street Journal reports X2 has been in talks with Rio Tinto, BHP Billiton and Anglo American about picking up the companies’ unwanted operations.

Davis said his company would continue to “carefully review a number of opportunities in the sector in detail”.

“Whilst value creating opportunities are increasingly evident, the long-term nature of our strategy provides us with the flexibility to target those opportunities where we see the greatest potential for value creation,” he said.

Davis led a management team at Xstrata that turned the $500 million-market-value coal producer into a $50 billion major through ten years of mergers and acquisitions.

He stepped down from Xstrata following a $44 billion Glencore takeover in May 2013.

The X2 team is made up of a raft of ex-Xstrata executives including former finance director Trevor Reid.

Image: www.thetimes.co.uk

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