22/04/2009 - 09:13

FMG gets China approval for $645m deal

22/04/2009 - 09:13

Bookmark

Upgrade your subscription to use this feature.

Fortescue Metals Group has received a key Chinese approval for the $645 million placement deal with Hunan Valin Iron and Steel Group Company.

FMG gets China approval for $645m deal

Fortescue Metals Group has received a key Chinese approval for the $645 million placement deal with Hunan Valin Iron and Steel Group Company.

In a statement today, FMG said it has received the official nod from the Chinese government's National Development and Reform Commission (NDRC) for the transaction.

"The NDRC approval was the key milestone for the transaction and paves the way for the Chinese Ministry of Commerce and the State Administration of Foreign Exchange to formalise the Agreement," FMG said in a statement.

Last month, Treasurer Wayne Swan gave his approval for the placement, which will see Valin subscribe to 260 million new FMG shares at $2.48 each to raise $644.8 million.

Mr Swan placed several conditions on the deal, including a shareholding cap of 17.55 per cent.

Together with Valin's acquisition of Harbinger Capital Partners' 275 million FMG shares, Valin will emerge with a 17.33 per cent shareholdering, the second largest in the company.

Earlier this week, FMG confirmed it was in early stage talks with various parties regarding future investment and financing.

Funds generated from the Valin deal and future transactions will be used to expand FMG's Pilbara iron ore operations.

Shares in FMG were up 11 cents to $2.63 at 10:51 AEST.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options