Chalco Buys Winsway Stake as SouthGobi Deal Stalls
Aluminum Corp. of China Ltd. isn’t letting its stalled takeover of SouthGobi Resources Ltd. stop its coal ambitions.
On Monday evening, the company, also known as Chalco, said it would buy a 29.9% interest in Hong Kong-listed Winsway Coking Coal Holdings Ltd. for HK$2.39 billion (US$307.9 billion), to become the companys’ single largest shareholder. The price, at HK$2.12 a share, is a 22.5% premium over Winsway’s closing price of HK$1.73 on Friday.
Earlier this month, Chalco’s plan to diversify away from aluminum into coal by buying a controlling stake in SouthGobi Resources Ltd. from Canada’s Ivanhoe Mines Ltd. was dealt a blow when the Mongolian government said it was reviewing the proposed change of ownership. It suspended certain exploration and mining activities by SouthGobi in Mongolia for its flagship Ovoot Tolgoi coal mine.
Rio Tinto Plc, which owns a 51% stake in Ivanhoe, said this month it would review the stake sale in SouthGobi to Chalco after it gained control of Ivanhoe’s board. Chief executive Tom Albanese said he is seeking to “understand the Government’s position now that we are the new management of Ivanhoe,” but maintained that the transaction is commercially competitive and that Chalco presented the highest offer.
Winsway shares were up 9% on Monday before the announcement of the deal after the market was closed. Chalco closed Monday down 4%, but is up 1.3% on Tuesday morning in Hong Kong.
On Monday evening, the company, also known as Chalco, said it would buy a 29.9% interest in Hong Kong-listed Winsway Coking Coal Holdings Ltd. for HK$2.39 billion (US$307.9 billion), to become the companys’ single largest shareholder. The price, at HK$2.12 a share, is a 22.5% premium over Winsway’s closing price of HK$1.73 on Friday.
Earlier this month, Chalco’s plan to diversify away from aluminum into coal by buying a controlling stake in SouthGobi Resources Ltd. from Canada’s Ivanhoe Mines Ltd. was dealt a blow when the Mongolian government said it was reviewing the proposed change of ownership. It suspended certain exploration and mining activities by SouthGobi in Mongolia for its flagship Ovoot Tolgoi coal mine.
Rio Tinto Plc, which owns a 51% stake in Ivanhoe, said this month it would review the stake sale in SouthGobi to Chalco after it gained control of Ivanhoe’s board. Chief executive Tom Albanese said he is seeking to “understand the Government’s position now that we are the new management of Ivanhoe,” but maintained that the transaction is commercially competitive and that Chalco presented the highest offer.
Winsway shares were up 9% on Monday before the announcement of the deal after the market was closed. Chalco closed Monday down 4%, but is up 1.3% on Tuesday morning in Hong Kong.
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