FIRB approves Chinese purchase of Aquila Finance: 30-October-09 by AAP
The federal government has given the green light for the $285 million acquisition by China's largest steel maker of up to 19.99 per cent of coal miner and iron ore explorer Aquila Resources.
Australia's Foreign Investment Review Board (FIRB) had approved the transaction, Aquila said in a statement on Friday.
The final hurdle to be cleared is approval by Chinese regulators after Aquila shareholders voted in favour of the proposed deal at the company's general meeting in Perth on Wednesday.
"Whilst the proposed issue of shares to Baosteel by the company is for 15 per cent of the expanded issued share capital of the company, Baosteel has FIRB approval to acquire up to 19.99 per cent," Aquila said.
"Subject to receipt of relevant Chinese regulatory approvals which have been sought by Baosteel, the company anticipates completion of the transaction in the latter half of November."
The deal is Baosteel's first major international strategic investment in a public company and secures it a long-term supply of raw materials.
Baosteel will have a preferential opportunity to directly invest in most of Aquila's projects and will provide support in sourcing financing from Chinese institutions, Aquila said in a statement in August.
"Aquila looks forward to working closely with Baosteel and to fast tracking the company's significant coal, iron ore and manganese projects," Aquila said on Friday.
"The company considers that Baosteel's investment in Aquila is a major vote of confidence in the company and its management."
Baosteel vice-president, Dai Zhihao, has been nominated to join Aquila's board.
Baosteel is a powerful partner for Aquila as it is expected to resume control of China's iron ore price negotiations with major global miners next year.
China Iron and Steel Association - whose members account for 90 per cent of the nation's steel mills - took the lead this year and has been criticised after the talks dragged on longer than ever before.
Separately on Friday, Singapore-based Lion-Asia Resources was notified that its $123.5 million or 70 cents per share cash takeover offer for Perth-based iron ore explorer Polaris Metals NL will not be subject to assessment by FIRB.
This is because the value of the deal is less than the $219 million threshold for non-US investments in Australian companies, a Polaris spokesman told AAP.
Article tags: aquila, aquila resources, baosteel, china iron and steel association, ore, polaris metals
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