Sumitomo (TYO:8053) provided funding to the buyers of its 54% stake in Madagascar's Ambatovy nickel operation, helping smooth its exit from the money-losing project, Reuters reported on Tuesday, citing three unnamed sources.
The Japanese trading house has invested $3 billion in Ambatovy over two decades and accumulated $2.5 billion in losses, and it recently took a $418 million hit from the deal, the news wire said.
Some of the financing will be used to repair cyclone damage at Ambatovy, where production has been suspended since February and is expected to resume by end-June, the publication said.
The stake is being acquired by former Glencore nickel trading head Jason Kluk and South Africa's Zungu Investments, with the deal set to close by end-September, the report said.
Sumitomo did not reply to MTNewswire's query at press time.
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