Freeport-McMoRan gets $7B loans to buy energy cos.
PHOENIX (AP) — Freeport-McMoRan Copper & Gold Inc. said Tuesday that it has signed up $7 billion in new loans to help pay for its planned $20 billion acquisition of oil and gas companies Plains Exploration & Production Co. and McMoRan Exploration Co.
The purchase price includes $11 billion in debt. The deals are expected to close by the end of June.
The miner, based in Phoenix, announced the acquisitions in December. The purchases could create a natural resources conglomerate with assets ranging from oil rigs in the Gulf of Mexico to a huge copper mine in Indonesia, but there been some shareholder backlash over the deal's high costs.
At the time the deals were announced, Freeport-McMoRan said that it had secured $9.5 billion in financing to fund the cash portions of acquisitions and to repay outstanding Plains Exploration debt.
The company said Tuesday that existing lender commitments were cut to $5.5 billion from $9.5 billion because of the new $4 billion term loan. It matures five years from when Freeport-McMoRan starts borrowing.
It also signed up for a five-year, $3 billion credit line, which will replace an existing $1.5 billion facility.
Freeport-McMoRan shares fell 80 cents, or 2.3 percent, to $34.24 in midday trading.