what chance a competitive bid?, page-12

vishalt - ozl's mines do not have massive cashburn, read last sentence from article below. the reason they might want ph is that it is operational unlike olympic dam.

OZ seeks early nod for takeover
Barry Fitzgerald
February 28, 2009

OZ MINERALS is to push Treasurer Wayne Swan for an early clearance for the $2.6 billion takeover bid from China's state-owned Minmetals.

The push follows OZ's securing of a one-month extension of its $1.1 billion debt facilities from a consortium of local and overseas banks, with the extension a condition for Minmetals' 82.5¢-a-share bid proceeding.

OZ still needs to secure agreement from its banking syndicate to extend its financing facilities until two weeks after the takeover by Minmetals, by scheme of arrangement, is implemented.

Given Minmetals intends giving the banks what they want by paying off or refinancing all of OZ's debt, it is clearance from the Treasurer under foreign investment review guidelines that is OZ's last hurdle to get the recommended Minmetals offer to shareholders.

Minmetals is due to hear from Mr Swan on March 21, unless the Government takes up the option of subjecting the application to another 90 days of scrutiny.

OZ managing director Andrew Michelmore said the Government needed to look at the Minmetals bid as a deal that offered a "solution for all stakeholders (shareholders, banks, employees and suppliers)".

Without the bank refinancing, which has now been secured against the backdrop of the Minmetals bid, OZ faced the prospect of going into administration, Mr Michelmore said.

He also said that clearance for Minmetals would not be controversial given that there was "no chance" of the Chinese using the acquisition to manipulate prices for commodities produced by OZ.

That was because OZ does not produce the bulk commodities of iron ore and coal that are sold on annually negotiated prices. It its China's ability to influence bulk commodity prices that has made Rio Tinto's $US19.5 billion ($A30.4 billion) compact with China's state-owned Chinalco controversial.

OZ shares climbed 7¢, or 12.5 per cent, to 63¢ a share on news of the refinancing breakthrough. They fell as low as 40¢ a share earlier in the week in response to what OZ said was "outrageous" scaremongering on the impact of the refinancing not coming through by a broking outfit. The continuing share price discount on the proposed bid from Minmetals reflects uncertainty about Mr Swan's decision on the bid, given the growing debate about China's raid on the Australian resources sector.

OZ confirmed yesterday that its slash-and-burn response to the collapse in commodity prices was paying off in that all of its continuing operations were cash positive.