Apex Files for Chapter 11, Arranges Sale of San Cristobal
Apex Silver said it had entered into an agreement with Sumitomo Corp., 11 of the 12 lenders under the San Cristobal project finance facility and other parties holding Apex Silver debt under which, following receipt of a Bankruptcy Courtapproved disclosure statement, the involved parties will vote in favor of a joint plan of reorganization.
Also, on January 12, 2009, Apex Silver struck a deal with Sumitomo under which Sumitomo agreed to purchase Apex Silver’s interests in the San Cristobal mine for a cash price of $27.5 million. Under the terms of the agreement, Apex Silver will be released from liabilities associated with the mine, including its guarantee of San Cristobal indebtedness, and will be reimbursed for $2.5 million in expenses it previously paid for the benefit of the mine.
ASMC and Sumitomo also agreed that ASMC will provide certain management services to the San Cristobal mine for a specified time following completion of the purchase and emergence from the Chapter 11 proceeding. ASMC will receive an annual fee of $6 million and a potential annual incentive fee of $1.5 million for services that will include management of technical and operating activities, administrative support, information technology and local community relations.