Embattled OZ Minerals Ltd has promised a statement before trading today on the new takeover proposal from would-be suitor, Minmetals of China.
OZ shares were suspended yesterday as the miner negotiates an extension with its bankers to its debt refinancing obligations that was due last night.
China Minmetals Group, the country’s biggest metals trader, made a revised takeover offer for OZ yesterday after its earlier bid was blocked last Friday on national-security grounds.
OZ told the ASX yesterday it had received an offer for all its assets excluding the Prominent Hill and Martabe mines and its listed investments.
No value for the new bid was given. The blocked bid was worth around $2.6 billion or 82.5c a share. The shares closed at 55.5c ahead of the suspension.
There has been previous speculation that Owen Hegarty, the founder of Oxiana (one of the two companies which merged to form OZ last year) is interested in either prominent Hill and or Martabe.
It’s also been suggested that BHP Billiton may still be interested in Prominent Hill, which cost just over $1 billion to bring into production late last year.
The revised offer, if credible, may help OZ Minerals, the world’s second-largest zinc mining company, gain an extension from lenders on the $1.2 billion in debt that was due last night
“The proposal will also provide a complete solution to OZ Minerals’ refinancing issues,” the company said in the statement.
A further announcement on refinancing talks will be made before the start of trading today. The talks are yet to be completed, the statement added.
If Prominent Hill and Martabe are excluded, Minmetals may get control of the Sepon copper and gold mine in Laos, the Century and Rosebery zinc mines in Australia, the Avebury nickel project in Tasmania and other projects in the country and Canada.
OZ Minerals says the revised proposal from China Minmetals to acquire the bulk of the company would "provide a complete solution to OZ Minerals’ refinancing issues”.
That indicates the Chinese company has offered more than $1.3 billion for OZ in a deal that excludes the Prominent Hill mine, the Martabe gold project in Indonesia and listed investments, including one in uranium explorer Toro Energy.
The Foreign Investment Review Board may take until June to decide whether it will approve Minmetals’s purchase of the company’s assets excluding Prominent Hill.
Therefore OZ has to get its bankers to sign-off on an extension of financing for at least the next three months.
OZ had previously tried to sell the mine to the likes of BHP and Barrick Gold of Canada.
Prominent Hill could be sold and raise much of the money OZ needs to find to satisfy the banks.
That it hasn’t done such an obvious deal indicates that either it can’t be done at prices on offer, or that the OZ board is unwilling to sell what amounts to its best asset.
And last night, Federal Treasurer, Wayne Swan approved a deal that will see a Chinese company take a bigger interest in Fortescue Metals.
The Treasurer said he had approved the application by Hunan Valin Iron and Steel Group for up to a 17.55% shareholding in Fortescue Metals Group, subject to the formal and strict undertakings I have sought from Hunan Valin, and which have also been agreed to by Fortescue Metals Group.
“These undertakings are as follows:
- Any person nominated by Hunan Valin to Fortescue’s board will comply with the Director’s Code of Conduct maintained by Fortescue;
- Any person nominated by Hunan Valin to Fortescue’s board will submit a standing notice under the Corporations Act 2001 of their potential conflict of interest relating to Fortescue’s marketing, sales, customer profiles, price setting and cost structures for pricing and shipping; and
- Hunan Valin and any person nominated by it to Fortescue’s board will comply with the information segregation arrangements agreed between Fortescue and Hunan Valin.
“Hunan Valin will report to FIRB on its compliance with these undertakings.
“These undertakings ensure consistency with Australia’s national interest principles for investments by foreign government entities, which I set out in February 2008.
“They ensure the appropriate separation of Fortescue’s commercial operations and customer interests, and support the market-based development of Australia’s resources,” he said.
