magnitogorsk assets frozen..?, page-44

Report from SMH yesterday with some good detail. Date of hearing set for Dec 9 so not long to wait.

MMK Australian assets frozen
December 2, 2011

OAO Magnitogorsk Iron & Steel, controlled by billionaire Viktor Rashnikov, had some of its Australian assets, including a stake in Fortescue Metals Group, frozen under a court order sought by Eurasian Natural Resources Corp.

MMK, as the company is known, is prevented from disposing of, dealing with or diminishing the value of any of its Australian assets up to the value of $858 million, according to a November 25 order made in Sydney by Federal Court Justice Steven Rares.

This includes its 4.99 per cent stake, valued at about $735 million, in Perth-based Fortescue, Australia's third-largest iron ore exporter.

Swiss trader ENRC Marketing AG, a unit of the Eurasian Natural Resources, which has operations in Kazakhstan, Russia and Brazil, has said that it's in dispute with MMK over iron ore shipments.

MMK last month agreed to buy Flinders Mines Ltd for about $554 million in cash, giving the Russian steel maker control of a proposed iron ore project in Australia.

MMK reduced its orders to 700,000 metric tonnes of iron ore a month for the fourth quarter, even though it was contractually obligated to buy 1 million tonnes, ENRC said in a November 10 statement on its website.

The two companies agreed to an $US8.4 billion, 10-year supply contract in 2007. MMK has advised Adelaide-based Flinders Mines that the freezing of its Australian assets won't affect MMK's ability to complete the takeover, Flinders said yesterday.

A hearing is scheduled for December 9 at the court in Sydney.

Justice Rares issued the order following a hearing that was held without notice to MMK.

Flinders fell as much as 8.9 per cent to 25.5¢, the most in almost four months. Its shares traded at 26.25¢ in afternoon trading.

The case is between ENRC Marketing AG and OJSC Magnitogorsk Metallurgical Kombinat in the Federal Court of Australia.


Read more: http://www.smh.com.au/business/mmk-australian-assets-frozen-20111201-1o943.html#ixzz1fKEyfRYc