23/02/2009 - 08:43

FMG in halt over proposed raising

23/02/2009 - 08:43

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Fortescue Metals Group has gone into a trading halt pending an announcement about a capital raising.

FMG in halt over proposed raising

Fortescue Metals Group has gone into a trading halt pending an announcement about a capital raising.

"Fortescue Metals Group Ltd requests a trading halt pending an expected announcement during the course of the week regarding a proposed capital raising," Fortescue said in a letter to the Australian stock exchange this morning.

Shares in FMG last traded at $2.83.

Last week, FMG confirmed it was in talks with London-based Anglo American and China Investment Corp (CIC) over investment opportunities and had appointed JP Morgan Australia, Grant Samuel and Azure Capital as corporate advisors.

Today, The Financial Review reported that FMG is planning to raise at least $500 million in new equity, which will be issued to institutional investors.

Hunan Valin Iron and Steel, which is reportedly backed by CIC, is planning to take a 14 per cent stake in FMG, possibly by buying between a five to 10 per cent stake from hedge fund manager Harbinger Capital, which holds a 15.9 per cent stake in FMG.

The Financial Review reported that talks between Harbinger and Valin are ongoing.

Meantime, Valin is reportedly investigating an investment of as much as $3 billion, needed to expand FMG's Pilbara iron ore operation to 120 million tonnes per annum.

Currently, the mining rate is some 55mtpa.

 

 

 

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