November 21, 2008

Shougang confirms that mine purchase in Australia blocked

It is reported that Mr Zhu Jimin chairman Shougang Group has confirmed that its acquisition for Australian iron mine company Mount Gibson Iron Ltd is blocked.

As per report the Takeovers Panel of Australia has noticed Shougang that it has accepted the petition raised by Mount Gibson Iron and is dealing with the arbitration and therefore Mr. Zhu declined to give any comment.

Shougang Concord International Enterprise Co Ltd, a listed arm of Shougang Group, reached an agreement with Russia's Gazmetall Holding to buy 9.74% of Mount Gibson Iron and gain an option to buy another 9.98% stake. But this deal puts Shougang Group under suspicion of breaking the Australian law of corporate, because what it effectively controls in Mount Gibson Iron is already large enough to trigger tender offer.

Mount Gibson Iron announced that it found Shougang Group had already held 20.22% and 16.09% stakes in it via another two subsidiaries, while the local requires the investor to start tender offer process if it has controlled 20% of an Australian listed company.