China Aluminium Network
Chalco takeover bid in jeopardy
Edited by : AL CIRCLE
1 min read
Coal miner SouthGobi Resources (1878) saw its shares plunge after the Mongolian government suspended its licenses, sparking fears the move may scupper a takeover bid by the Aluminium Corp of China (2600), or Chalco.
Earlier this month, state-run Chalco agreed to pay US$926 million (HK$7.22 billion) for a 57.6percent stake in SouthGobi held by Canada-based Ivanhoe Resources.
Late Monday, SouthGobi announced the Mongolian government had suspended the firm's exploration and mining licenses. The suspension included its flagship Ovoot Tolgoi coal mine.
"The Mongolian government's intervention appears to be like a political move rather than a commercial decision," UOB Kay Hian analyst Helen Lau said.
SouthGobi fully owns four coal projects in Mongolia - three development projects, and mineral exploration licenses.
SouthGobi shares plunged as much as 13.3percent yesterday to a one-month low, before closing 10percent down - their biggest one-day fall in nearly seven months - at HK$49.90.
Chalco shares fell 1.6 percent to HK$3.70.
Separately, SouthGobi said Deloitte & Touche has resigned as the company's auditor, and been replaced by PricewaterhouseCoopers. REUTERS
Earlier this month, state-run Chalco agreed to pay US$926 million (HK$7.22 billion) for a 57.6percent stake in SouthGobi held by Canada-based Ivanhoe Resources.
Late Monday, SouthGobi announced the Mongolian government had suspended the firm's exploration and mining licenses. The suspension included its flagship Ovoot Tolgoi coal mine.
"The Mongolian government's intervention appears to be like a political move rather than a commercial decision," UOB Kay Hian analyst Helen Lau said.
SouthGobi fully owns four coal projects in Mongolia - three development projects, and mineral exploration licenses.
SouthGobi shares plunged as much as 13.3percent yesterday to a one-month low, before closing 10percent down - their biggest one-day fall in nearly seven months - at HK$49.90.
Chalco shares fell 1.6 percent to HK$3.70.
Separately, SouthGobi said Deloitte & Touche has resigned as the company's auditor, and been replaced by PricewaterhouseCoopers. REUTERS
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