Tuesday, 3 July 2012

Chalco delays bid for SouthGobi stake

Chinese aluminum giant Chalco Tuesday delayed plans to acquire a controlling stake in Mongolia-focused coal miner SouthGobi Resources (CVE:SGQ).

The Chinese metals company is continuing to work on securing regulatory approvals in Mongolia and outside.

In April, Chalco unveiled a $926 million bid for a controlling interest in SouthGobi, which owns large coal projects in Mongolia. The proposed deal has the backing of Ivanhoe Mines Ltd (TSE:IVN)(NYSE:IVN), which currently has a controlling stake in SouthGobi.

Ivanhoe and Chalco agreed to cooperate with Mongolia to ensure any requirements under the country's new strategic foreign investment legislation were satisfied.

Chalco and Ivanhoe said Tuesday they would extend the time for Chalco to make a proportional takeover bid for up to 60 per cent of SouthGobi stock by 30 days.

Chalco will make its C$8.48 per share proportional offer to all SouthGobi shareholders on or before August 3, the companies said. No reason was given for the delay.
Ivanhoe has entered into a lock-up agreement with Chalco and has agreed to tender all of its SouthGobi shares, on a pro-rata basis.

Ivanhoe, majority-owned by global miner Rio Tinto (NYSE:RIO)(LON:RIO), plans to use the proceeds from the deal with Chalco to fund development of the massive Oyu Tolgoi copper-gold project in Mongolia.

No comments:

Post a Comment