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. Last Updated: 07/27/2016

Norilsk Seeks Funds for Buy

Norilsk Nickel is seeking $3.5 billion of loans to fund its takeover of LionOre Mining International, a banker familiar with the transaction said.

The company hired Societe Generale and BNP Paribas to arrange the loan, said the banker, who declined to be identified because the transaction is not completed. The banks will begin syndicating the loans to a wider group of lenders after regulators approve Norilsk's takeover, the banker said.

Norilsk last week agreed to buy Canadian miner LionOre for 6.8 billion Canadian dollars ($6.41 billion), giving Norilsk access to mines in Australia, South Africa and Botswana.

The rest of the cost of the acquisition will be funded with Norilsk's own cash.

LionOre on May 15 said first-quarter profit surged 11-fold as prices for the metal used to make stainless steel rose. The price of nickel has increased eightfold in the past five years and last month traded at a record $51,800 a ton.

Australian and Finnish anti-monopoly authorities have already approved Norilsk's acquisition. Swiss regulators have also given their go-ahead to Norilsk's takeover of LionOre, Prime-Tass reported Wednesday. The nickel producer still needs approval from regulators in South Africa and Norway.

Norilsk is rated BBB- by Standard & Poor's, the lowest investment grade. Moody's Investors Service in October raised the Russian company's credit rating by two levels to Baa2, the second-lowest investment grade.