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pinched it from lcy thread

NMDC to buy 50% in Aussie firm
By CR Sukumar May 24 2011 , Hyderabad
Tags: News
NMDC has agreed to acquire 50 per cent stake in the Australian iron ore firm Legacy Iron Ore, marking its first overseas acquisition and concluding its more than three years of overseas search.

The acquisition enables NMDC to use Legacy, which is also into gold and manganese mining, as an Australian vehicle to acquire large-scale bulk commodity projects such as coal and iron ore.

The deal would be subject to all the necessary regulatory, foreign investment authorities and shareholders approvals of both the companies. After obtaining all the approvals, NMDC will have the right to appoint its nominees to the board of Legacy.

Rana Som, CMD of NMDC, said due diligence is currently going on and the deal gives NMDC an access into the Australian market and devise strategy for further expansion.

?Legacy is delighted to have entered into a MoU whereby NMDC can acquire up to 50 per cent of the company, allowing Legacy to be become a diversified resource house,? said Legacy?s chief executive officer Sharon Heng in a statement.

Saying that this is the first investment of its type by NMDC into the Australian resource sector, Heng said, ?Legacy is delighted to be the company chosen as NMDC?s vehicle to acquire and develop more advanced projects.?

Legacy proposes to seek the approval of its shareholders within 28 days from the execution of agreement with NMDC.

A senior NMDC official, who did not want to be named, said, the mining company is ?availing the services of one of the four top accounting firms for financial and legal due diligence, which will be completed within 60 days.?

While this official said ?the cost of the acquisition could be around $100 million,? NMDC?s director (technical), NK Nanda said, ?It is too early to comment on the valuation because the financial due diligence process is currently on.?

NMDC is also at an advanced stage of negotiations for acquisition deals with Australian firm Minemakers, which owns two of the largest rock phosphate projects in the world, one each at Wonarah and Namibian, and Stellar Resources, another Australian firm that owns iron ore, gold, lead-zinc and uranium mines.