Eramet reaffirms shareholder support for capital hike as Duvals hire adviser

Eramet’s main shareholders including the Duval family have reaffirmed support for a capital increase by the mining group, a spokesperson said on Wednesday, playing down news that the Duvals had hired a bank to advise them on their options.

The struggling French firm said in February that it was planning a capital increase of 500 million euros ($583.80 million) as well as asset sales to shore up cash, after a slump in earnings and a jump in debt last year.

“Eramet’s main shareholders have reaffirmed their support for the group’s strategy and the funding plan announced on February 18,” the spokesperson said in an emailed statement, adding: “Management and shareholders remain fully committed to the success of this capital increase.”

The statement by the nickel, manganese and lithium producer followed a Financial Times report in which the newspaper, citing people familiar with the matter, said that the Duval family, Eramet’s largest shareholder, has hired bankers as it considers the sale of its stake.

The family has appointed Lazard to explore options for its 37% holding and to advise them ahead of the company’s capital raise, the report added.

The spokesperson confirmed that the Duvals had appointed an adviser but said it was “standard practice” in the context of a capital increase.

A representative for the Duval family declined to comment. France’s state shareholding agency, which is Eramet’s second-largest shareholder with a 27% stake, also declined to comment.

Eramet shares were up 3.6% by 14:06 GMT, having climbed by more than 7% earlier in the session.

The terms of the capital increase are due to be announced ahead of the miner’s annual shareholder meeting next month.

Eramet suffered last year from lower manganese prices, a weaker dollar and production setbacks. It is facing further pressure this year from a sharp cut to its permitted nickel mining volumes in Indonesia and a halt to its mineral sands output in Senegal following a fire.

Eramet has also been embroiled in a management crisis following the firing of former CEO Paulo Castellari and the suspension of finance chief Abel Martins-Alexandre within days of each other in February.

($1 = 0.8565 euros)

(By Akanksha Khushi, Gus Trompiz and Augustin Turpin; Editing by Sonia Cheema, Kirsten Donovan and Bernadette Baum)