Email This Post - Print This Post Print This Post

By John Helmer, Moscow

At a closed-door hearing today at the Chelyabinsk Arbitrazh Court, Judge Natalia Bulavintseva again refused to hear argument for and against the proposed half-billion dollar acquisition of an Australian iron-ore miner, Flinders Mines, by Magnitogorsk Metallurgical Combine (MMK). The court secretary Sergei Povalyaev said the judge ordered the hearing postponed for another month, until August 1. The reason, the source said, was to allow a “request for financial and economic expertise, which was filed by one of the parties.” Because of the closed door, he claimed he could not say whether MMK filed the delay-making request, or Flinders Mines, or the purported plaintiff in the action, MMK minority shareholder Elena Egorova.

In a statement issued in the Australian morning by Flinders Mines, before today’s hearing began in Chelyabinsk, the company told the Australian Stock Exchange that time has run out for completing the takeover, but that until MMK formally issues a notice of its intention, the deal may still be completed if another buyer doesn’t make Flinders Mines an offer first. According to the Flinders Mines statement, the “Quit Date of 30 June 2012 has now passed. Although the SIA [Scheme implementation Agreement] remains in effect until it is validly terminated by either party, parts of the SIA no longer apply. As the 30 June Quit Date has now passed, the exclusivity period under the SIA has ended.”

MMK was asked to explain its intention. Kirill Golubkov, spokesman for the steelmaker, replied that his company “has just become aware of the postponement of the hearing, so the official position is being formulated now.” He added that he could say no more.

MMK’s stock price rose by 3% in Moscow trading on expectation that the deal would be cancelled today. In trading on the Australian exchange, Flinders Mines shares gained by the same percentage.

Leave a Reply