Posted in | Mining Business | Potash

BHP Billiton Gains Strong Support from Banking Sector for Potash Corp Bid

The bid from Australian resources giant BHP Billiton bid for Potash Corp of Canada is being supported by major world banks. Out of BHP Billiton's US $45 billion syndicated note facilities for the Potash bid, 16% have been picked up by major Australian banks.

This loan facility is the largest one that has been arranged since the start of the global financial crisis. However the bid made for Potash Corp of Saskatchewan was oversubscribed. A good indicator of the trust of investors in the health of BHP Billiton's balance sheet.

Over the weekend the lead managers of the loan namely Santander, Barclays, BNP Paribas, JPMorgan and RBS confirmed that the loan facility had been divided evenly between 25 global banks. All of which have had previous business dealings with BHP Billiton. Each of these banks has agreed to a US $1.8 billion of potential funding. These banks include Commonwealth, ANZ, NAB and Westpac, the four major banks in Australia.

A potential competitor to the BHP bid is the Chinese Sinochem Group which is asking for government assistance in its bid for the Potash Group which could rival the hostile takeover bid placed by BHP Billiton. BHP has agreed to pay fees on the loan facility even if the bid for Potash Corp is unsuccessful. Shares in Potash reacted positively to the announcement.

Joel Scanlon

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Joel Scanlon

Joel, originally from the UK, emigrated to Australia in 1995 and spent 5 years working in the mining industry as an exploration Geo-technician where he developed skills in GIS Mapping and CAD. Joel also spent a year working underground in a gold/copper mine. Upon moving to the North Coast of NSW, Australia Joel worked as a graphic designer for a leading consultancy firm before starting a successful business providing graphic and web design services to local businesses on the eastern seaboard of Australia. Joel is skilled in project management, web programming, design, animation, database and networking, software and editing. Joel has been with AZoNetwork since its inception in 2000.

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