Czech mining group NWR said on Monday it will acquire a 25% stake in iron ore company Ferrexpo for £126.6 million (about $221 million).
NWR said it would buy the stake from NWR’s majority shareholder RPG Industries, which acquired the Ferrexpo stake this year. “Whilst opportunistic, this transaction is entirely consistent with our regional consolidation strategy set out at the time of our IPO in May,” NWR Executive Chairman Mike Salamon said in a statement. The acquisition will be funded entirely from NWR’s cash position, which was €688 million at the end of June, the company said. It said the deal would potentially impact 2008 dividends, but the 2009 dividend should be unaffected.
An extraordinary general meeting of shareholders will be convened to seek approval for the transaction, NWR said. NWR stock jumped 9.5% to 121 Czech koruna on Monday, beating the Prague PX index which gained 4.1%.
Ferrexpo plc is a Swiss headquartered resources company with assets in Ukraine, principally involved in the production and export of iron ore pellets, used in producing steel. (Reuters)