Australian iron ore company Flinders Mines has entered into a trading halt as the company awaits the results of a court hearing over a proposed $554 million takeover by Russian steelmaker Magnitogorsk Iron & Steel Works.
Flinders and MMK came to an agreement over the proposed sale in November, in which MMK would purchase 100 percent of Flinders Mines’ issued shares. A minority shareholder, however, secured an injunction in a Russian court that prevented the two companies from executing the agreement, Finance.NineMSN.com.au reports.
“The motion and associated injunction relate to the scheme implementation agreement between Flinders and Magnitogorsk Iron and Steel Works OJSC dated 25 November 2011,” Flinders said, according to Finance.NineMSN.com.au.
Elena Egorova, the minority shareholder, argued that the proposal involved operational and financial risks to MMK, thereby adversely affecting her investment. Since the injunction, MMK has filed a motion with the arbitration court of Chelyabinsk Region of Russia to discharge the court injunction.
The current trading halt will continue until the opening of trading on Monday, or until the court makes an announcement.
The MMK purchase of Flinders would involve a number of projects located in the Hamersley Ranges in the Pilbara region of Western Australia, and the Mid-West iron ore province of Western Australia.