Australian Perth-based mining company Fortescue Metals Group (Fortescue) has announced that it issues to add 35 million shares to its agreement with China's leading steel mills, Hunan Valin Iron and Steel Group Company Ltd (Valin).
Accordingly, Fortescue has agreed the request of Valin to issue 35 million Fortescue shares to Valin to raise an additional A$86.8 million ($55.26 million). The terms of the issue are the same as the previous share subscription agreement between the two companies, signed on February 25, which raised A$558 million (about $355 million).
As a result, Fortescue has now raised A$644.8 million (approx. $410 million) in new capital in the past two weeks.
If Valin receives foreign investment review board approval, Valin's total Fortescue shareholding will increase to 535 million shares, which is equivalent to 17.4 percent of the company, but remains below the 17.55 percent standstill maximum shareholding agreement agreed between Fortescue and Valin as part of the original share subscription agreement.
The funds raised through the Valin placements offers a strong financial base for Fortescue to expand above its 55 million mt annual production capacity.