01/04/2009 - 14:06

Australasian finance, merger deals lapse

01/04/2009 - 14:06

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Australasian Resources has widened its scope of financiers after Chinese project partner Shougang missed a deadline while the merger agreement with one of billionaire Clive Palmer's companies has expired.

Australasian Resources has widened its scope of financiers after Chinese project partner Shougang missed a deadline while the merger agreement with one of billionaire Clive Palmer's companies has expired.

Chinese company Shougang Concord, which holds a 6.33 per cent stake in Australasian, had until yesterday to submit a finance offer for the development of the $2.7 billion Balmoral South iron ore project.

Shougang was exclusively given an extra six months after the original deadline of September 20 2008 lapsed with no formal offer made.

Australasian managing director Andrew Caruso said both companies were working collectively towards a formal agreement however there were many things to take into account.

"I don't like to say they've [Shougang] failed," Mr Caruso told WA Business News.

"The prevailing environment is challenging and for an investment this size there's a lot of things to cover and a lot of things to consider."

He said both companies were working towards an offer before an agreed extended deadline of June 30 2009.

As a result of Shougang missing the March 31 deadline, Australasian said it will start formal talks with a number of interested parties that have expressed interest in playing a key role in the project.

Meantime, the merger implementation agreement signed with Resources Development International (RDI) has lapsed with the merger shelved for now.

One of the merger conditions was that RDI list on the Hong Kong Stock Exchange before yesterday.

Mr Caruso declined to rule out a merger with RDI later down the track.

"We're unaware of Clive's ongoing intentions or timetables for any potential listing, so at this stage the merger agreement has lapsed and there's no immediate intentions to change that," he said.

Mr Palmer holds a 66.4 per cent interest in Australasian, which acquired the Balmoral South project from Mr Palmer's other private company, Mineralogy.

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