Just weeks after an attempt by one state-run Chinese company to score a stake in Rio Tinto
China's sovereign wealth fund -- China Investment Corporation (CIC) -- will purchase a 17% stake in heavily indebted miner Teck Resources
For Teck, the move goes a long way toward rescuing the company from the ravages of acute debt distress. Combined with the $1.4 billion raised through sales of gold assets and a one-third stake in the Waneta Dam in British Columbia, the miner will now have little trouble meeting the October payment of $1.9 billion. As CEO Don Lindsay points out, the stake also builds strategic ties with "a very deep-pocketed investor who would potentially participate in future development projects."
As long as this equity sale proceeds, I am delighted to finally reaffirm Teck Resources' long-term viability as a major player in global resource mining. In its epic quest for liquidity, the company continues to pursue the sale of a minority stake (about 20%) of coal operations. Frankly, I am surprised at the lack of movement on this front. The merger of Alpha Natural Resources
Given Teck's limited negotiating stance, I suspect that a Foolish bargain remains up for grabs ... not unlike the bargain Arch Coal
Until Teck executes the sale of a coal stake, it's too early to declare the company out of the woods, but with a timely liquidity injection from a promising new partner, Fools can finally scope a clearing ahead.