Both the companies have agreed to the terms of the takeover agreement, offering 80 pence in cash for each share and a 2-year convertible loan note with a principle value of 40 pence.
Commenting on the acquisition, IMIC chairman Haresh Kanabar stated that the company is delighted to agree with the terms of the proposed offer for Afferro with the board of Afferro.
"We believe that the combination of IMIC and Afferro is highly attractive in that it brings together Afferro’s high quality African iron ore assets with a deliverable infrastructure and offtake solution," added Kanabar.
Afferro chairman David Netherway said: "The Board believes that the 120p per share proposal offers good value and the ability for further upside with the exposure to the strong relationships built by IMIC with the key consumer that is China."
Meanwhile, IMIC is keen to follow a Plan of Arrangement in Canada to acquire Afferro, a process that requires the approval of at least two thirds of Afferro’s shareholders.
In addition, the proposed acquisition will be subject to the approval of IMIC shareholders and the documentation to implement a reverse takeover as per the AIM Rules of the London Stock Exchange.
