Q: Hi: what does LIF do besides own 15% of IOC? I really don’t understand their business.
Thanks
Thanks
5i Research Answer:
The royalty makes up nearly all of the company's total assets. The Corporation holds a 15.10% equity interest in IOC directly and through its
wholly-owned subsidiary, Hollinger-Hanna Limited, and receives a 7% gross overriding royalty and a 10 cent per tonne commission on all iron ore products produced, sold and shipped by IOC. Royalty businesses are a bit like 'annuities'. A company provides another company with a large influx of cash, in return for an annual cash flow stream.