Minmetals Development to Buy Units for $1.64 Billion
(Corrects next year to this year in third paragraph.)
The Shanghai-listed company signed an agreement to acquire two iron-ore mining and processing companies by issuing 794.16 million shares at 12.5 yuan each, the company said in a statement to Shanghai’s stock exchange today. The final price and number of shares is pending regulatory and shareholder approval, it said.
Minmetals is buying the assets amid a 22 percent rally in iron-ore prices from a low in May as China boosted stockpiles to the highest level in a year and economic growth rebounded. Spot prices were unchanged at $135.00 a ton today, according to an index compiled by The Steel Index Ltd. Prices may average $125 a ton this year, JPMorgan Chase & Co. said in a Dec. 16 report, up from a previous prediction of $115.
China will import 872 million tons of iron ore in 2014, 8.3 percent more than previously forecast, and inbound shipments may increase to almost 1 billion tons by 2018, according to an Oct. 2 report from Australia’s Bureau of Resources and Energy Economics.
The acquisition won’t change the listed company’s share holding structure, according to its statement today. Separately, Minmetals said it will raise as much as 3.3 billion yuan in a private share sale to add liquidity.
Minmetals Development shares last traded in Shanghai at 13.56 yuan on July 23 before suspending. The stock is expected to resume trading on Jan. 6, the company said in a separate exchange statement today.
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