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PrintHONG KONG (XFN-ASIA) - Chinese steelmaker Shougang Concord International Enterprises Co Ltd said it will buy 10.2 pct of Mount Gibson Iron Ltd for 66 mln aud to secure long-term iron ore supply from the Australian mining firm.
The Chinese firm said it will buy 110 mln shares of Mount Gibson at 0.60 aud per share, a 48 pct premium to Mount Gibson's closing price of 0.405 aud on October 22, the last trading date before the deak ws reached.
Shougang Concord also undertook as an underwriter to find buyers for another 50 mln shares of Mount Gibson that the miner offered in a rights issue.
If it had to buy the extra shares itself, its stake in the mining company would rise to 14.9 pct.
Under the deal, which is subject to Australian regulatory approval, Mount Gibson agreed to supply Shougang Concord with iron ore from its three Australian mines as long as the mines are active.
Details of the ore supply arrangement are to be determined later based on normal commercial terms.
Earlier this year, Shougang Concord terminated a bid to purchase a 19.73 pct stake in Mount Gibson, which is Australia's leading independent iron ore producer with current annual production exceeding 6 mln tons. ( 1 aud = 5.25 hkd)
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