Teck to sell 17 percent stake to China for C$1.7 billion

TORONTO (Reuters) - Teck Resources (TCKb.TO) said on Friday it will sell a 17.2 percent equity stake to state-owned China Investment Corp through a private placement that will raise C$1.74 billion ($1.5 billion) and help the miner pay down debt.

Teck, a top miner of zinc, copper, and metallurgical coal, will sell 101.3 million shares at C$17.21 each, a 7 percent discount to Thursday's closing Toronto-listed price of C$18.50.

In a statement, Teck Chief Executive Don Lindsay said the transaction was "an attractive opportunity for Teck to establish a relationship with a major Chinese financial investor."

Teck said CIC, a sovereign wealth fund, has said it is acquiring the shares as a long-term passive financial investors and has agreed to hold the stock for at least a year after closing.

Vancouver, British Columbia-based Teck will use the proceeds of the deal to cut bank debt. The miner took on nearly $10 billion in debt last year to buy Fording Canadian Coal Trust, which made it a top producer of metallurgical coal, or coal used in the steelmaking process.

The company has sold some assets to pay down the debt, and has said it planned to sell a 20 percent stake in its coal business. Lindsay has said the company has seen strong demand for coal out of China, which is overhauling its steel industry.

($1=$1.16 Canadian)

(Reporting by Cameron French; Editing by Frank McGurty)