selloff article, page-2

Another article from http://www.news.com.au/heraldsun/story/0,21985,24835072-664,00.html

This part: 'The miner also revealed a US court had frozen $US1.5 billion ($A2.2 billion)' sounds like the journalist is out by a factor of 1000. I thought it was $US 1.5 million.




'Andrew Forrest loses nearly $450m in one day

Investors wiped almost 21 per cent from the miner's market value, with its shares losing 44.5c to $1.715 amid fears the self-styled third force in Australian iron ore has struck financial trouble.
Mr Forrest's wealth now stands at $1.7 billion - well down from its peak of $13 billion mid-year when he held the title of Australia's richest man.
Fortescue's stellar rise from ambitious wannabe to the nation's third biggest iron ore producer after giants BHP Billiton and Rio Tinto, has earned it market darling status in recent years.
But the miner has not been immune from the impact of the global financial crisis, which has wiped a staggering 80 per cent from the value of listed miners globally in recent months.
Yesterday's investor panic followed Fortescue's announcement late on Friday that it had taken the unusual action of issuing 1.55 million shares to raise $3.65 million to pay contractor bills.
The miner also revealed a US court had frozen $US1.5 billion ($A2.2 billion) of its funds as part of legal action being brought against it by shipping companies following the suspension of some delivery contracts.
Fortescue spokesman Cameron Morse yesterday confirmed the miner was keen to retain cash.
"We issued shares to conserve our cash position given the importance of cash in the present market," he said.
The miner had $624 million in the bank at the start of October - but it has not updated the market on its cash position since.
News of the share issue and frozen funds follow Fortescue's decision to cut iron ore output by 10 per cent this year following a sharp slowdown in Chinese demand for the steel-making ingredient.
Ord Minnett resources analyst Peter Arden said Fortescue appeared to be under siege but added the miner would probably be all right in the long run.
"The bottom line is that even though they might be going through trying times, the big Chinese steelmakers like Baosteel really want them to succeed and I feel at the end of the day they will be there to help them," he said.

Asked if Fortescue could turn into an OZ Minerals-type situation, Mr Arden responded: "At the moment, really, it's a case that any hint of problems with funding is enough."

Melbourne-based OZ Minerals - product of the much-trumpeted merger of mid-tier mining houses Oxiana and Zinifex - is locked in last-minute talks to renegotiate about $800 million in debt with its lenders by December 29.

Zinifex had more than $2 billion in the bank when the merger with Oxiana was unveiled in March.

That has now dwindled to $280 million, partly because of plunging values for lead, zinc, copper and, to a lesser extent, gold. '