24/09/2009 - 10:44

Shougang sells Mt Gibson stake for $176m

24/09/2009 - 10:44

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Another Chinese entity has made its way onto Mount Gibson Iron's share register, with the coal company buying Shougang Concord's interest in the miner for $176.3 million.

Another Chinese entity has made its way onto Mount Gibson Iron's share register, with the coal company buying Shougang Concord's interest in the miner for $176.3 million.

Coal producer Fushan International Energy Group has executed two agreements with Mount Gibson's two major Chinese shareholders, in a deal that will see it emerge with a 14.34 per cent stake in the miner.

Under the first agreement, Fushan will buy all of Shougang's Mount Gibson shares under a share swap arrangement valued at $HK1.19 billion ($A176.3 million).

Shougang will still hold an indirect stake in Mount Gibson through its shareholding in Fushan.

Fushan said in a statement that the original cost of the Mount Gibson shares was $91.45 million.

Shougang entered onto Mount Gibson's share register late last year after it agreed to underwrite a $162.5 million rights issue with another Chinese company, APAC Resources, and subscribed to $66 million worth of shares in a private placement.

The shares in both capital raisings were priced at 60 cents. Shares in Mount Gibson were down two cents to $1.15 at 12:20 AEST.

In the second agreement, Fushan will buy all of Shougang's shares in APAC in a share swap deal valued at $HK606.1 million ($A90 million). Fushan will then hold a 16.8 per cent interest in APAC.

Both agreements are subject to regulatory approval.

Mount Gibson said in a statement that both transactions will not affect the long-term offtake agreements with Shougang and APAC that were entered into late last year.

Further comment was being sought from Mount Gibson at time of publishing.

 

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