12/12/2008 - 13:24

Shareholders ratify Grange-ABM merger

12/12/2008 - 13:24

Bookmark

Upgrade your subscription to use this feature.

Grange Resources shareholders have overwhelmingly voted in favour of its merger with private Tasmanian magnetite iron ore pellet producer Australian Bulk Minerals.

Grange Resources shareholders have overwhelmingly voted in favour of its merger with private Tasmanian magnetite iron ore pellet producer Australian Bulk Minerals.

More than 99 per cent of Grange shareholders voted in favour of the transaction at a general meeting in Perth today.

The transaction remains subject to Chinese government approvals for steel maker Jiangsu Shagang and commodity importer RGL Holdings, which hold 61.2 per cent and 18 per cent stakes in ABM respectively.

The transaction is expected to be completed in late January, with the merger taking effect on June 30.

"The merger of Grange and ABM will transform Grange into Australia's leading producer and exporter of high value magnetite products," Grange said.

Grange aims to develop a $US1.7 billion ($A2.6 billion) magnetite iron ore pellet operation in the southern West Australian town of Albany by 2012.

Grange managing director Russell Clark will take on the same role in the merged entity while Xi Zhiqiang will replace Grange chairman Anthony Bohnenn, who will remain as a non-executive director.

"The fact that they have retained me as managing director is evidence from ABM that they are comfortable with who we are and the direction in which we want to go," Mr Clark told WA Business News.

The merger is effectively a back-door listing for ABM, with Grange shareholders to hold 23 per cent of the merged entity with the balance held by ABM shareholders.

Mr Clark said there was no concern among Grange shareholders about merging with a 90 per cent-owned foreign company.

"Absolutely not. The majority of our shareholders are in Europe. We are a global company which has built up a relationship of trust with ABM over a year," he said.

"ABM are ultimately iron ore users looking to secure iron ore sources."

Shares in Grange were up 2.5 cents, or 6.41 per vent, at 41.5 cents at 1501 AEDT.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options