NMDC to submit binding bid for Legacy Iron Ore by month end

NMDC to submit binding bid for Legacy Iron Ore by month end

New Delhi: All set to make its first acquisition overseas, state-owned iron ore miner NMDC is likely to submit, by month end, the bid to acquire 50% stake in Australian exploration firm Legacy Iron Ore for around 200 crore.

“This will be our first acquisition abroad. Hopefully, by month-end, it (the bid) should get submitted," NMDC’s director finance S Thiagarajan told PTI.

He, however, remained tight-lipped on the deal size.

“I cannot comment on that. It’s between us and them (Legacy Iron Ore) and is confidential," Thiagarajan said, when asked about the deal size.

According to industry sources, the deal size could be in the range of A$32-40 million (Rs 150-200 crore).

NMDC is likely to take weighted average of last three months of Legacy’s scrips, which has been in the range of 10-20 cents per share, they said.

The sources added that the company board is likely to meet sometime next week to take a final call on bidding terms and its offer price for Legacy’s 50% shares.

On 24 August, Legacy had announced halt in trading of its shares on Australian Securities Exchange (ASX) for two days, while anticipating the bid from NMDC. However, later it said that the bid is anticipated to be made by mid-September.

“It is anticipated that the approved formal binding offer will now be tabled to the Legacy Board by mid-September," it had said in a filing to ASX on 26 August.

When asked about it, NMDC’s director finance said that “bidding process takes time. Being a PSU, we need to take extreme care before making any financial decision. So, all I can say that by month-end we are likely to submit the bid."

Legacy Iron Ore, based in Perth, holds prospective iron ore tenements in both the central Yilgarn and Pilbara areas of Western Australia. It currently has five exploration licenses related to iron ore and gold mining in Australia.

On the other hand, NMDC is looking to secure iron ore supplies to feed burgeoning demand in the country and had inked an MoU with Legacy Iron on 24 May to acquire a 50% equity stake in the Australian company.

According to Legacy, the stake sale would enable the Australian miner to unlock and monetise the value inherent at its Mt Bevan iron ore mines and gain a large cash infusion.