Evraz Seeks Leverage for Takeover in China, Morning Post Says By...

Evraz Seeks Leverage for Takeover in China, Morning Post Says

By Bei Hu

July 23 (Bloomberg) -- Evraz Group SA, the steelmaker part- owned by Russian billionaire Roman Abramovich, may announce a general offer for Cape Lambert Iron Ore Ltd. as early as today to gain leverage for a Chinese takeover, the South China Morning Post reported today, citing people it didn't identify.

Shareholders of Cape Lambert, an Australian iron-ore company, are scheduled to vote July 28 on an agreement from June to sell a 1.56 billion-ton iron ore mine worth $393 million to MCC Mining, the Australian unit of China Metallurgical Group Corp., the Hong Kong-based English-language newspaper said.

Evraz plans to use the 19 percent stake it took in Cape Lambert last week to press Beijing for approval of its plan to buy as much as 51 percent of Chinese steelmaker Delong Holdings Ltd. for as much as $1.5 billion, the Post said. The takeover has been pending Chinese regulatory approval since February.

Evraz can't block the Cape Lambert iron ore mine sale to MCC Mining with its existing stake. Australian takeover rules require a shareholder with 20 percent or more of a listed company to make a general buyout offer, making it impossible for Evraz to buy more shares in Cape Lambert without such an offer, the newspaper said.

To contact the reporter on this story: Bei Hu in Hong Kong at [email protected]

Last Updated: July 22, 2008 20:18 EDT