FMG/China

Run the flag up at PIOP "hello we are here FMS"


Chinese firms said to eye Fortescue's infrastructure assets

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A Fortescue Metals train loaded with iron ore from the company's Cloudbreak operation arrives at their Port Hedland facility for export, in the Pilbara region of Western Australia.
by Vinicy Chan, Brett Foley and Dinesh Nair
China's Hebei Iron & Steel Group and Tewoo Group have approached Fortescue Metals Group about acquiring a stake in the iron ore producer's infrastructure assets, people with knowledge of the matter said.
The state-owned Chinese firms are separately talking to Fortescue about investing in the infrastructure serving its operations in Western Australia's Pilbara region, the people said. They may also consider buying stakes in some of Fortescue's mines, two of the people said, asking not to be identified as the information is private. Fortescue shares jumped as much as 5.6 percent, the most in a week, in Sydney trading Wednesday, making it the best performer on the ASX 200. They were up 5.1 per cent at $1.865 in midmorning trade.
Fortescue, controlled by billionaire Andrew Forrest, said in March it would consider selling minority stakes in mines, railroads and ports. Iron ore prices have tumbled to the lowest since at least 2009 as the largest suppliers, including Rio Tinto, expanded production just as economic growth slowed in China.
Australia's third-largest iron ore producer, which has $US7.2 billion ($9.8 billion) in net debt, abandoned a previous plan to sell a stake in its infrastructure assets in 2013 after saying the offers it got didn't meet its objectives for value and terms. In March it sold $US2.3 billion of bonds after halting an earlier, larger offering amid the rout in commodity prices.

Largest steelmaker

Talks with the Chinese firms are at an early stage and may not result in a deal, the people said. Luke Forrestal, a spokesman for Fortescue, declined to comment. Representatives for Hebei Iron & Steel and Tewoo declined to comment.
Fortescue, which has a market value of $US4.2 billion, has held talks with Baosteel Group and Japanese firms about selling a stake in some of its mines, people familiar with the matter said in June.
Hebei Iron & Steel, China's largest steelmaker by production capacity, produced 47.1 million metric tons of steel and booked sales of 280.6 billion yuan ($61.3 billion) last year, according to its website.


State-owned Tewoo, based in the northern Chinese port city of Tianjin, runs businesses including commodities trading, logistics, financial services and real estate. It had 114.8 billion yuan of total assets at the end of 2013, its website shows.
Bloomberg





Fairfax Media Australia