久久久无码人妻精品无码_6080YYY午夜理论片中无码_性无码专区_无码人妻品一区二区三区精99

Economy

Markets

Industries

Insights

Reports

Events

Fortescue to expand iron ore sales to China's Valin

(Agencies)
Updated: 2009-02-25 14:32

Fortescue Metals Group Ltd, Australia's third-biggest iron-ore miner, agreed to quadruple its iron ore sales to an arm of Chinese steel maker Hunan Valin Iron and Steel Group, now its second-largest shareholder.

Related readings:  Fortescue in advanced investment talks with Valin  Fortescue Metals may join ore price negotiation  Steel major eyes stake in Australian firm

Under the co-operation agreement, Fortescue said on Wednesday that, subject to mine expansions, it would increase its supply to up to 4 million tons a year to Valin subsidiary Xiangtan Steel from 2010 onwards, up from 1 million tons a year now.

The agreement follows a deal on Tuesday in which Valin agreed to pay A$1.2 billion ($770 million) for a 16.5 percent stake in Fortescue.

The group, which raised A$558 million with the sale of shares to Valin, launched a separate sale to institution investors to raise a further A$500 million, but left the door open to calling it off.

"We're still assessing whether to proceed," said Fortescue's spokesman, Cameron Morse.

Morse said the board would be looking at a number of factors, including the fact that it hopes to raise billions more through a sale of hybrid securities to China's sovereign wealth fund, China Investment Corp.

Any deal with the $200 billion fund is likely to come well after Valin's investment secures approvals from Australian and Chinese regulators.

Valin agreed to buy shares from Fortescue at A$2.48 a share, a 12 percent discount to Fortescue's close last Friday ahead of a trading halt. However the broader market has fallen since then, impacting bidding for the shares Fortescue is trying to sell to other investors.

The A$2.48 a share that Valin paid reflected its interest as a "strategic" investor, and institutions were likely to pay less, said one fund manager, who declined to be identified because the bidding process was subject to confidentiality agreements.

The share sale is being handled by JP Morgan, Southern Cross Equities and CLSA.