Market turmoil threatens Strike raising

Strike Resources Ltd's $53 million capital raising with Russian billionaire Alisher Usmanov is under threat following the global financial turmoil.

Perth-based Strike said today it has held negotiations with Mr Usmanov's investment vehicle Gallagher Holdings in London earlier this week regarding the status of due diligence investigations and the implications of the downturn in market conditions.

The due diligence follows a deal struck in July where Gallagher agreed to subscribe to $103 million worth of shares in two tranches with the first tranche, worth $49.7 million, already completed.

Strike said today that both parties have agreed in "good faith" to replace the second tranche of the placement with unsecured convertible notes to the value of $53.4 million, convertible into Strike shares at an issue price of $2.75 each.

"At the date of this announcement no binding agreement has been reached between the parties and the Company can give no assurance that such agreement will be reached," Strike said.

The convertible notes raising is subject to Foreign Investment Review Board and shareholder approvals.