State-owned NMDC, which has put in a bid to acquire 50% holding in Australian exploration firm Legacy Iron Ore, is expecting to get a favourable decision by tomorrow.
"We are expecting an announcement by the Legacy board, recommending our offer to shareholders, on Wednesday," an NMDC official said.
Earlier in the day, the Australian Securities Exchange (ASX) halted trading of Legacy's shares till tomorrow, following a company request. "The trading halt relates to a strategic and material cornerstone investment the company is undertaking with NMDC of India. The trading halt is expected to halt until the earlier of the company releasing an announcement or the commencement of trading on Thursday," Legacy said in a filing to the ASX. Last week, the Australian firm had said that announcement of its decision on NMDC's offer, which had put a binding bid on September 14, would be made today. The bid of the Indian company was envisaged in the MoU signed by both the firms on May 24, which proposed to make NMDC a strategic investor in Legacy by giving it 50% stake in the Australian firm. The Indian firm, which has been looking to secure iron ore supplies from abroad, will make its first overseas acquisition following the Legacy purchase. "With our expertise in iron ore mining and steel making and their (Legacy's) exploration expertise, we will make a perfect synergy for both the companies. Simultaneously, it will provide us a ready made foothold in Australia," NMDC Chairman Rana Som had said. Industry sources have pegged the deal amount somewhere between AUD 32 million to 40 million (Rs 150-200 crore). Legacy Iron Ore, based in Perth, holds prospective iron ore tenements in both the central Yilgarn and Pilbara areas of Western Australia.
It has five exploration licences including for gold mining. Yesterday, the scrips of Legacy had closed on a flat note on ASX at 0.19 cents apiece. On the other hand, NMDC share price closed up 0.55 per cent on the Bombay Stock Exchange today at Rs 248.55 apiece. In its filing to ASX on September 15, the Australian exploration firm had listed out number of benefits with having NMDC as strategic investor, including a substantial cash injection from an investor who is debt free and having about $4 billion in cash. It also said that this would also help Legacy in becoming a substantial mining company from its current status of a junior exploration firm, with the help of NMDC in developing its projects.