The sale of Cape Lambert’s $400 million flagship magnetite project looks set to go down to the wire after China Metallurgical Group Corp’s (MCC) cash again failed to materialise.
With the deadline looming, Cape Lambert director Tony Sage was last night hosing down suggestions the deal had fallen through, saying a $240 million downpayment had been lodged in an Australian trust account administered by MCC’s lawyers and the sale would be settled by today.
A series of delays since the expected settlement date last Thursday has fuelled speculation the deal could go the way of Cape Lambert’s failed project sales agreement with Singaporelisted steel group Delong Holdings last year.
But Mr Sage remains optimistic, pointing to MCC’s surprise development deal with Russian steelmaker and one-time Cape Lambert suitor Evraz last week as proof the Chinese group wanted the project.
“They’ve already on-sold 75 per cent of the project, so if they don’t settle that agreement falls to the ground and Evraz, who didn’t make a takeover bid (for Cape Lambert) because of that agreement will feel free to take us over,” he said.
“The delay hasn’t been caused by anything done by MCC, it’s been caused by paperwork that we needed to get done under the terms of the agreement.
“I believe we’ll have a settlement date tomorrow (Wednesday), which is the last date they could have settled.”
Cape Lambert shares closed 4¢ lower at 58¢.
The deal is one of a string of iron ore transactions in the wind, including an offer for Australasian Resources.
Independent experts for Australasian were last night poring over a formal takeover bid from iron ore billionaire Clive Palmer that is believed to value the company at nearly $972 million.
As revealed by WestBusiness last month, Mr Palmer approached the 66.6 per cent-owned Australasian as part of his ambitious plan to build his unlisted Resource Development International into a diversified resources giant with listings in Hong Kong and Australia.
A formal bid is now expected to be revealed by tomorrow after Australasian shares were placed in a trading halt yesterday. The bid is thought to be on similar terms to Mr Palmer’s indicative offer, which valued the company at a notional $2.20 a share.
Australasian is understood to have appointed BDO Kendalls Corporate Finance to assess the bid in addition to last week’s appointment of RC Capital Advisors, boutique law firm McKenzie Moncrieff and a board subcommittee.
Australasian’s $2.7 billion Balmoral South magnetite project in the Pilbara is understood to form a key part of Mr Palmer’s ambitions, which would see him raise $5 billion to $7 billion to float RDI by the end of the year.
KATE EMERY
CFE Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
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