Dj Paramount Global Cl A, Inst Holders, 3Q 2024 (Paraa)

New On The Block

• Starbucks is looking to sell a stake in its Chinese operations. Same-store sales in China fell 14% last quarter, with the Seattle-based coffee retailer seeking partnerships to adapt to tough economic and competitive pressures.

Bankruptcy Block

• Snack producer Hearthside Food Solutions went bankrupt. The private equity-owned company looks to offload the $1.9 billion in debt accumulated under the ownership of Partners Group Holding AG and Charlesbank Capital Partners. The two firms bought Hearthside for more than $2.4 billion. Assets and liabilities hover between $1 billion and $10 billion. Last year, bankrupt private equity portfolio companies in the U.S. outpaced the number of bankruptcies in 2020. It remains to be seen whether 2024 will be worse.
• Northvolt filed for bankruptcy with debt of $5.8 billion. Recall how the Swedish battery maker, which supplies Volkswagen AG and Bayerische Motoren Werke AG (OTC:BMWYY), bargained with banks to raise debt last year. Now, it’s hoping to restructure under U.S. Chapter 11.

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Updates From The Block

• Google‘s $2-billion investment in Anthropic is in jeopardy, according to Bloomberg. Anthropic is a Jeff Bezos-backed rival to artificial intelligence (AI) innovator OpenAI. The U.S. Department of Justice (DOJ) recommended in a court filing Wednesday that Alphabet Inc‘s Google divest its Chrome browser to dismantle its monopoly on online search. It doesn’t end there. Google should be barred from doing any deals with companies that control where consumers search for information, regulators say. That includes AI products.
• Ricky Williams‘ Highsman merges with hemp brand Frozen Fields, forming Top Seed Inc. The partnership blends cannabis and hemp sectors, leveraging R&D to enhance products and control supply chains.
• MakeMyTrip acquires Happay from CRED. The deal is expected to enhance corporate travel and expense management solutions in India. Happay’s team will integrate with MakeMyTrip, supporting over 900 clients post-acquisition.
• Amcor plc and Berry Global Group, Inc. agreed to merge in an all-stock transaction, with the deal valuing Berry stock at $73.59 per share.
• Nippon Steel executives have traveled to Pennsylvania to garner support for their $15 billion acquisition bid for U.S. Steel . The Japanese steel giant is encountering political resistance in Washington. Takahiro Mori, vice-chair of Nippon Steel, arrived in Pittsburgh on Saturday to advocate for the acquisition. The deal faces opposition from both President Joe Biden and President-elect Donald Trump, who prefer U.S. Steel to remain under American ownership.

Notes From The Block

Joshua Robinson, co-founder of Darwin Financial Company, announced a $55-million financing deal with INYOAG LLC. The funds will help develop a solar-powered mine in Inyo County, California where there are proven reserves of silver, lead, zinc, tungsten, and copper. Here’s our conversation with Robinson:

BZ: What is the deal structure between Darwin Financial and base metals miner INYOAG?

Robinson: The deal structure is a $55M project financing package split into three components: $17.5 million and $12.5 million in six-year notes tied to sulfide and oxide production respectively, plus a $20-million conditional equity commitment that only triggers if the mine hits $10 million in monthly revenue. We get 17% of gross revenues from both production tracks, structured through secure lockbox arrangements. It’s not a straight equity investment, we specifically designed it this way to provide further upside exposure.

Are you looking for additional investors/joint venture partners?

Yes, we’ve deliberately structured this to create multiple layers of upside potential, which is pretty unique in the mining space. We’ve created a hybrid model that offers both near-term cash flow from production and significant expansion potential. We’re already seeing interest from established mining players, but we’re particularly excited about bringing new investors into the space who understand the strategic value of critical minerals.

What are the downsides to depending on foreign sources of critical minerals?

China’s recent actions really highlight the urgency here. They’ve already implemented export controls on germanium and gallium, and just added antimony to that list. This isn’t theoretical anymore, it’s actively happening. We need to build regional resilience in our supply chains, particularly for these minerals that are crucial for defense and technology. The Darwin Mine gives us a unique opportunity to establish a domestic source for multiple critical minerals in a single asset, which is rare to find.

Will the mine be powered by solar?

The 100MW facility wouldn’t just power the mine. It would generate significant excess clean energy that we can sell back to the grid. What’s particularly interesting is that we can develop utility-scale energy storage systems using minerals we’re already producing. It creates a virtuous cycle where our mining operations directly support clean energy deployment

What are your 2025 goals?

For 2025, our key goals are reaching 300 tons per day on sulfide production within six months and 200 tons per day on oxide within nine months of funding. That puts us at $ 10 million in monthly revenue, which then triggers the deeper mine development program.

For last week’s Deal Dispatch, click here.

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