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| Edited By: KV Ramana |Source: DNA |Updated: Mar 18, 2018, 03:55 AM IST
Mining company NMDC plans to complete the bidding process for acquiring a 50% stake in Australian mining company Legacy Iron Ore sometime in September.
“The due diligence is just over and there is a further process to be followed including the (NMDC’s) board approval. Hopefully, we will do it in mid-September,” S Thiagarajan, NMDC’s director (finance), told DNA.
The bid documents were earlier expected to be filed this week. In fact, Legacy had already sought stoppage of trading in its scrip on the Australian Securities Exchange, implying the completion of the deal in a day or two.
In a fresh filing with the exchange, however, the Australian company said, “Legacy has granted NMDC an extension of time to finalise the necessary internal approvals.”
“We really don’t know about it. But, we have been following the due procedure including the due diligence. Since the due diligence is just over, we take it to the next level of getting all the approvals,” Thiagarajan said to a query on the extension.
According to him, there is no competition for acquiring the stake since NMDC has an exclusivity agreement valid till September 2011. “Only we are bidding,” he said.
No official comment on the value of the bid to be filed by NMDC was forthcoming, though sources said it would be less than $100 million.
NMDC and Legacy have been working on the deal for some time now. The first MoU to take the deal forward was signed on May 24.
According to Legacy, the stake sale would enable it to unlock and monetise the value inherent at Mt Bevan and gain a large cash infusion. Mt Bevan offers low strip ratios, coarse grind size, low silica and an average concentrate grade of 69.8% iron. Importantly, the project is located close to road, rail and an existing deep water port, mitigating the need for excessive investment in infrastructure, including port facilities.
